BSGV Will Start Litigation in the Urals

29.07.2009 — News

THE SVERDLOVSK OBLAST.

Foreign banks will try to recover about 140 million roubles (3.2 million Euro) from the Ekaterinburg company PSM-Hydraulics Ltd. through courts. The Sverdlovsk arbitration court will start proceedings on the suit of JSC Banque Societe Generale Vostok (BSGV) for the sum total of 21 million roubles on 31 July 2009.

The press service of the court informed RusBusinessNews that lenders filed more than 20 suits. For instance the Uralsky branch of ZAO Raiffeisenbank Austria demands the repayment of 119.2 million roubles, OJSC VTB Bank – 154.8 million roubles, OJSC URSA Bank – 337.8 million. Recovering these sums, experts think, may cause the bankruptcy of the enterprise.

The PSM-Hydraulics Ltd. Management is hoping to restructure the debt claiming that the borrowed money has been spent predominantly on equipment upgrades. To implement the three years long investment programme successfully was not possible due to dumping prices from foreign producers of road building machinery. Russian plants including PSM-Hydraulics can not sell their products at the time of crisis.  

Representatives of the Machine-builders Union of the Sverdlovsk Oblast confirm that the enterprise is a victim of the classic approach to the development of modern machine-building production based on borrowed capital. Without the help from the State the PSM-Hydraulics bankruptcy is inevitable.