LIPETSK ENERGY INDUSTRIES PREPARING FOR AUTUMN BANKRUPTCY

An audit conducted at Lipetsk City Energy Company JSC (LCEC) showed a decline in financial performance in almost all areas. The company ended 2020 with a loss of 127.8 million rubles. The newly appointed head of the company, Andrei Sorokin, called the situation a ‘complete insanity’, saying that he would expect the company to go bankrupt in September 2021 if no action is taken.

Last year, the City Council deputies heard the results of the auditors' work at a regular meeting. It turned out that the company owed about 216 million rubles to the three municipal enterprises that founded LCEC. The organization has 96.8 million rubles debts to the Lipetsk aeration station. Accounts payable in 1.4 billion rubles are almost 200 million more than accounts receivable.

The head of the enterprise believes that the reason for the deplorable state of finances in the organization was the boiler-houses in the city of Usman.

They bring annually up to 40 million losses, while the company is forced to pay 50 million rubles on a loan for their servicing. At the same time, the bank has already applied for the repayment of a loan for 700 million rubles in connection with negative results, as prescribed by the terms of the contract.

Representatives of the company refer to the consequences of the pandemic, during which many of the company's clients were not engaged in business activities, and electricity tariffs were reduced. However, the attention of the auditors was attracted by other facts not related to COVID-19.

Having no fee funds, the company did not skimp on investing finance in non-core assets. For example, 25 plots of land were purchased in the village of Zheltye Peski. The company paid 7.7 million rubles to the Svoy Dom company for 48 hectares of land. No one has begun to conduct any activity on this territory.

In the face of falling revenues and growing debt, LCEC increased its staff by 33 people, and 18 of them were hired for managerial positions.

The remaining places (17.5 units) were hired by four workers. Of course, there was not enough money to fulfill the investment program for water and electricity supply. Instead of the planned 585.1 million rubles, only 405.1 million rubles were allocated.

The question of how exactly a company carrying out several regulated economic activities (electricity transmission, cold water supply, sanitation and heat supply) ended up on the verge of bankruptcy remains to be resolved by the local authorities. However, they are now more concerned about preparation of the city for the winter, which could collapse if the company goes bankrupt.

According to a number of sources, it was planned to sell part of the company's assets (power grid) to Rosseti PJSC. Whether this deal will take place against the backdrop of the company's financial instability is unknown.