Vedomosti: "Unreasonable request"
Non-financial sectors need 3.5 trillion roubles
Nadezhda Ivanitskaya, Yevgenia Pismennaya
Russian companies have estimated that their rescue will cost 3.5 trillion roubles, but the government does not have that much.
First Deputy Prime Minister Igor Shuvalov has summed up the requests of a range of industries after a series of meetings with their officials: companies have asked for a total of 3.5 trillion roubles on top of the existing loan portfolio.
Most importantly, the industry meetings have helped work out a new scheme for providing state guarantees, fast and simple, which is why Prime Minister Vladimir Putin has instructed the government to draw up a list of strategic companies before the end of this week. In addition, Shuvalov said more work was required in the banking sector to increase Russian banks' capitalisation and encourage them to merge.
A source in Shuvalov's team said that part of the allocations required have been included in next year's budget, but did not specify how big the part was.
The draft of the 2009 federal budget stipulates an allocation of 325 billion roubles for anti-crisis measures, such as supporting the financial sector, using "Mother's capital" for mortgage payments, and providing assistance to specific industries, a Finance Ministry official said. Another 300 billion could be allocated for state guarantees. No additional anti-crisis amendments to next year's budget are planned so far, he added.
The government is studying the possibility of providing 3.5 trillion to support industries, a government source said, adding that it was not feasible because it would take up the whole reserve fund.
Part of the funds will be spent to support strategic companies, based on a relevant list to be approved on December 23.
Putin said the list could include up to 1,500 struggling companies across Russia, while Shuvalov amended yesterday that there would be 500 for now, 200 federal and 300 regional companies. However, the list will be left open and can be extended. This does not mean that all companies will be rescued at all costs, but some may be given a "soft cover," Shuvalov explained.
Appropriate ministries will take care of federal enterprises. Working groups will be set up, including bank and company heads to monitor the companies' performance. According to the monitoring results, a decision will be made on the need to initiate an anti-crisis programme and a relevant request will be sent to Shuvalov's commission.
Any company, public or private, requesting government support should present a financial rehabilitation plan as well as any other information authorities might require pertaining to the company's financial status.
The government, in turn, can issue them loans (or state guarantees or subsidies to cover their loan interest payments), augment their capitalisation, restructure their overdue taxes, or make changes to the customs and tariffs policy. The government has not yet made a final decision about which industries to support.
One approach described by Shuvalov suggests that the government support companies that showed stable performance earlier but found themselves defaulting on suppliers due to a limited availability of loans because of the global crisis.
Other companies hit by a sharp plunge in demand for their products after launching major technological retooling projects may also find themselves on the priority list.
There is another approach that emphasizes companies which, if closed down, might lead to social tensions. In this case, Shuvalov said, we should contact the shareholders, study the situation, and jointly work out a rehabilitation programme, or find an investor who could remedy the situation. He cited two major sectors at risk - large retail chains and developers with residential projects underway that are cooperatively financed by future property owners.
"We comply with all the criteria marking a strategic company," said Lev Khasis, CEO of Х5 Retail Group, a group operating several grocery chains. "We expect to be first on the list of retail companies entitled to government aid."
He also said his company was willing to submit any kind of documents, including those containing insider information, if the ministries sign a non-disclosure agreement.
It is only natural to require reciprocal confidentiality, said Dmitry Shmelev, head of Snegiri Development. "We would consider government aid as a last resort option, depending on the interest rates they offer," he added.
Even the 3.5 trillion roubles requested might not be enough, warned Igor Nikolayev, chief strategic analyst at the FBK private auditing firm, since one cannot be sure that companies will use the money appropriately.
If the government tries to solve the companies' problems by injecting liquidity only, it will not keep them from defaulting, but will instead increase pressure on the rouble and fuel inflation, said Natalia Orlova from Alfa Bank, adding that around 40% of the cash injected over the past four months simply added to the ongoing outflow of capital. More money will go the same way.
Who will be rescued
A strategic company entitled to government support should be owned by Russian residents and have a high social and economic significance, such as being the single or one of the few major employers in a city, an infrastructure or life-support company, a company having cutting edge or unique technologies, or be responsible for fulfilling international agreements and obligations.
