VEB Commences Funding to Civilian Division of Concern Tractor Plants

The Civilian Division of Concern Tractor Plants has commenced drawdown of a three-year revolving loan facility granted by Vnesheconombank.

RUB 1.9 bn will be used to replenish the working capital of the Concern's companies manufacturing civilian products. The purpose is to support business chains for manufacturing road building machinery, spare parts and OEM components which will allow the companies to deliver orders in a timely manner and achieve a stable production run rate.

The above is set out in the Concern's financial rehabilitation programme approved by Vnesheconombank's Supervisory Board in December 2016. The programme aims at preserving the core manufacturing assets of the military and civilian divisions of the Concern. At present, certain legal procedures are under way to divide the business into four divisions: military, civilian, agricultural and wagon-building.

Most urgent overdue payables were repaid in December 2016 - February 2017 followed by the provision of state support instruments to the Concern's leading civilian manufacturers Promtractor and Cheboksary Aggregate Works. To restore the planned operations and control the reorganisation procedures, the management team was expanded with VEB's professionals having extensive experience in implementing industrial projects and rectructuring procedures.

According to Deputy Chairman and Coordinator of Vnesheconombank's Sectoral Business Solution Unit Petr Zolotarev, Concern Tractor Plants is one of the leading Russian manufacturers of modern industrial, agricultural, utility and construction and special purpose machinery successfully implementing the key governmental import substitution programme. “The equipment produced by the Concern is exported to more than 40 countries. We will definitely retain these competencies,” he said.

Today, the total number of workers employed by the Concern approximates 20,000 people, including 8,500 people in the Chuvash Republic. The implementation of the financial rehabilitation plan and a full-fledged launch of the manufacturing facilities in the Chuvash Republic in 2017 will result in the creation of over 1,200 new jobs.

Tractor Plants is one of the largest Russian machine-building holdings integrating enterprises creating, manufacturing, selling and repairing equipment for Russian strategic industries: defense, mining, road building, timber stockpiling, agriculture, public utility and rail road. It is comprised of over 60 entities located in 10 constituent regions of the Russian Federation and 10 countries, including 14 manufacturing sites.

The companies hold top market positions in the segments in which they operate: mining, road-building and infrastructure, oil&gas, transport, defense and agriculture. Its product line consists of over 21,700 items, including 126 models and modifications of machinery, 19 wagons and open wagons, 21 models of attachable units, 18 models of internal combustion engines. Its client base includes over 500 customers from Russia and over 40 from other countries.

The Concern uses over 53,500 various materials and components supplied by 2,263 Russian and 102 foreign companies (from 10 countries).

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