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August 29 – September 4, 2011

Russian Alfa-Bank sues “Brestenergo”

The situation has not changed
Russian Alfa-Bank sues “Brestenergo”

In fact, the National Bank or the Government should have been defendants, as the NBB has set restrictions for state enterprises on exchange of ruble proceeds into currency and, consequently, on their ability to pay for the supplies.

Russian Alfa-Bank has filed to the Arbitration Court in Moscow two lawsuits against “Brestenergo” to recover overdue loans. Hearings will begin in October, the cost of action is about Br 430 thousand.

“Belenergo” (departmental concern), the Ministry of Energy and “Brestenergo” refused to comment the situation.

Comment

The suit filed by a Russian bank against a state-owned enterprise is interesting for the following reasons:

1. “Brestenergo” has the resources to repay the debt, however it cannot convert them into currency.

2. The situation is common for many state-owned enterprises. All in all, according to the data of the Central Bank of Russia as of 1 April, Belarusian companies and banks owe to Russian banks about USD 3 billion.

Therefore if and when Russian banks decide to claim the debts of the Belarusian enterprises, the word “default” will appear in the media.

In fact, the National Bank or the Government should have been defendants, as the National Bank has set restrictions for state enterprises on exchange of their ruble earnings into currency and consequently on their ability to pay for the supplies. Purchase of currency at the black rate may lead to criminal liability of directors, and most importantly, such costs cannot be calculated in the cost of production.

Therefore if and when Russian banks decide to claim the debts of the Belarusian enterprises, the word “default” will appear in the media.

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