Ust-Luga Company sells its electric networks to Lenenergo to avoid bankruptcy

Ust-Luga port complexUst-Luga Company, which is engaged with development of the eponymous sea port, negotiate with Lenenergo to sell part of its assets to pay off debt to VTB Bank and prevent from bankruptcy. Ust-Luga Company representatives had a hearing in arbitration court of St Petersburg and Leningrad region, which has a claim from VTB for its bankruptcy because of 532.9 million rubles (about 8.21 million USD) debt. At the hearing were presented options for settlement of the debt, as well as restructuring of the company in case to improve its liquidity. The court will continue with next hearing on May 24, which is deadline for Ust-Luga Company to find money for debt settlement.

“The negotiations between the company Ust-Luga and a potential buyer of electric networks, Lenenergo, are under way. Tomorrow there we will have a meeting and discuss the sale of electricity networks, which is planned to repay the debt”, said the representative of port operator.

The representative of VTB said in court that the total debt of the company is currently 532.9 million rubles, and the delay is a few months, during which were made only partial repayment. The bank do not see any prospects of repayment of the entire debt and published claim for bankruptcy of Ust-Luga Company.

In 2015, VTB has already sued the defendant because of the debt of 600 million rubles. The loan was granted in 2010 by the Leningrad region government guarantees for the construction of engineering and transport infrastructure of the port. Then, the parties entered into a settlement agreement. Later, the chairman of board of directors of Ust-Luga, told reporters that the company intends to pay off the debt by selling assets, but did not specify details. Still the both parties did not reached an agreement, but Leningrad region government abandoned from its functions as guarantee of the loan and urged both countries to settle the issues related to the fulfillment of obligations to creditors.

Ust-Luga Company was established in 1992 for the construction of a multifunctional sea trade port complex in the Luga Bay at the Gulf of Finland. In addition to the functions of the customer-builder trading port, it is engaged in complex development of the adjacent territory.