The Ministry of Industry and Commerce will contact the government to resolve the issue of state support to GAZ Group
TASS.- The feasibility of state support for GAZ Group, which is under US sanctions, through the purchase of vehicles for government agencies may be assessed in the second half of the year. The Ministry of Industry and Commerce will contact the government beforehand, regarding the need to purchase additional vehicles for government departments, as told by the minister Denis Manturov to journalists.
“The company currently operates at a normal pace. Government purchases, on the other hand, take place during the second half of the year as a rule, when vehicle purchase requirements of the departments are determined more clearly. Therefore, we will figure out a summary of the requirements of all the departments, before contacting the government with regards to the top-up procurement of ambulances and school buses. However, we are working on the subject for the moment” – said the minister.
As written by Kommersant previously, citing the letter of the CEO of GAZ Group: Vadim Sorokin to the Deputy Prime Minister of the Russian Federation: Dmitry Kozak, the company has applied for a 29.5 billion rubles government support. The company will take 40% production shrinkage risk due to US sanctions during the second half of the year, which, combined with the growing burden on working capital, will deprive the company of the opportunity to service the loan portfolio.
GAZ Group has specified that the subject is not only limited to direct financial subsidies. The company has proposed the allocation of the majority of the funds to the state clients of the group’s products and the remaining part to the subsidisation of the interest rates on loans.
Oleg Deripaska, the owner of 65% of controlling stakes at GAZ Group has announced a possible bankruptcy and the nationalisation of GAZ Group due to the US sanctions, which will take effect in July. The businessman does not give a chance of survival to the company under such circumstances, as many suppliers and partners have already stopped working with the factory, due to the risk of the second sanctions. Deripaska has also expressed his intention to reduce his shares in GAZ Group, a similar action taken in the case of En+, as a result of which the US has lifted the sanctions on Rusal.
