Armenian Chemical Giant Faces Possible Bankruptcy

YEREVAN (RFE/RL)–Armenia’s national power distribution company has asked a court in Yerevan to declare bankrupt the country’s largest chemical enterprise because of almost 1 billion drams ($2.7 million) in unpaid electricity bills.

The lawsuit filed by the Electricity Networks of Armenia (ENA) could hardly come at a worse time for the Nairit giant. The Yerevan-based company has been hit hard by the global economic crisis. Citing a plunge in international prices for synthetic rubber, its main product, the Nairit management halted production operations and sent the bulk of the company’s 2,000-strong workforce on unpaid leave in early December.

“We want an official clarification of the state of one of our largest clients and its financial position,” Yevgeny Gladunchik, the ENA chief executive, told RFE/RL before the start of court hearings on the case on Friday.

ENA is seeking bankruptcy proceedings against Nairit despite the latter’s pledges to repay the debt by the end of this month. Gladunchik was highly skeptical about them.

“The plant isn’t work, it’s barely surviving,” he said. “Ever since I started working with them, they’ve been promising to pay up ‘tomorrow.’ That tomorrow’ has been going on for six years.”

The Nairit director, Vahan Melkonian, claimed that the chemical giant, 90 percent of which is owned by an obscure British-registered firm, does not regard the legal action as a “serious threat” to its continued existence. “In the past three years have faced 227 court cases,” he told RFE/RL.

“That is not a huge sum,” Melkonian said, referring to the debt to ENA. “The company’s assets are worth a lot more.”

Melkonian was speaking by phone from Moscow where he claimed to have all but secured a fresh loan for Nairit from the Moscow-based Inter-State Bank of the Commonwealth of Independent States. He declined to specify the amount of the loan, saying only that the two sides are currently finalizing its “technical terms.”

The Inter-State Bank accounts for much of Nairit’s overall debt totaling $45 million. The figure includes roughly $600,000 in unpaid wage to company employees. According to Melkonian, the company will start eliminating the wage arrears next week.

For his part, Energy Minister Armen Movsisian reaffirmed on Friday the Nairit management’s pledges to recall 1,500 or so workers and resume operations by “the middle of April.”

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