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3 Dec, 2008 02:43

Saturn shielded from financial chaos by combined state and private sector efforts

Prime Minister Putin’s visit to Yaroslavl came with significant upside for embattled Aerospace firm, Saturn.

Nobody knew which region would host the Prime Minister until the last minute, and fortune tilted toward the Yaroslavl Region and its key production facilities.

Many Russian regions seem to face similar problems in financing credits and finding buyers for their produce.

Before the meeting with the Prime Minister there was talk in the corridors about a possible freezing of production.  However, Vladimir Putin came to the region with a rescue plan. Saturn will become part of a Government corporation. Shares will be bought out by the government at market price.

VTB will refinance company's debt. The Finance Ministry along with the Energy Ministry will prepare an additional share issue within half a year.

Gazprom, the Defence Ministry, and energy companies – the main customers – said that the combined efforts of Government and private companies' orders will keep the company operating. Prime Minister Putin gave the proposal his full blessing.
“The debts of the Saturn Research Centre will be rescheduled, VTB funds will be drawn, and 10 billion Roubles will be assigned for the purpose.  We may need additional funds, as well.  We will ensure purchases of Saturn products by key buyers, who include the Defence Ministry, transport companies, the United Aircraft Corporation, energy companies and Gazprom”

Altidiesel – a part of Gaz Group which produces Diesel engines – was another stop on his visit.

The two companies were lucky to be on the prime minister's tour. But clouds of uncertainty still loom over many other companies in the Russian region.

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