“ROSGEOLOGIA” IS PREPEARING FOR POSSIBLE BANKRUPTCY

The “Rosgeologia” joint-stock company informed the representatives of executive power about a threat of possible bankruptcy. The ministers of the main departments, having a direct interest in the work of the state holding, received the letters with alarming content from its CEO Sergey Gorkov.

What was the main purpose of the letters, received by Deputy Prime Ministers Andrei Belousov and Victoria Abramchenko, as well as the heads of ministries Dmitry Kobylkin and Maxim Reshetnikov? The CEO of “Rosgeologia” in his mails asks to include the company on the list of systemically important organizations. However, with the filing of the department of Dmitry Kobylkin, the company has already managed to be on this list. Perhaps the aim was an attempt to relieve part of the responsibility for what is happening? After all, if the bankruptcy takes place, then it will be possible to say that a warning has been received.

The main problem of “Rosgeologia” is a serious budget cut.

Due to all the troubles that hit the global and domestic economies, the companies began to cancel tendering, which is why the holding may miss about 35% of annual revenue. The subsidiaries (about 60 organizations of the holding) end up on the verge. If their bankruptcy takes place, the parent organization will not be able to avoid subsidiary liability to the creditors.

However, the matter is not limited by the reduction of counterparty’s expenses on the geological exploration (about 30 billion rubles, according to “Rosgeologia”). The fact is that the holding is already in debt for 13 billion rubles. And although the company continues to declare the absence of risks, associated with ensuring of the continuity of further activities, the experts indicate a violation of a number of contractual obligations on loans.

In his letters, Sergei Gorkov points out losses of 4 billion rubles which the company suffered from last year. The profit, earned a year before, was 8 times less than the current losses (about 500 million rubles).

The volume of annual revenue has decreased by 7%, amounting to about 27 billion rubles.

In his reports, the CEO of the company does not points to the “liquidity crisis” in vain, since the consequences of a violation of the bank covenants may indeed be critical if the holding needs borrowed funds and the banks refuse to provide them. Sergei Gorkov points out that about 12,000 employees (up to 20,000 in the field season) might not get paid in this case.

The experts believe that a lot will depend on the amount of cash that is currently on the balance of the enterprise. Much will also be connected with the terms within which “Rosgeologia” can pay off the existing debts. In addition, a sharp increase in debt by about 7 billion rubles over the past year is rather inappropriate in this situation.

Fulfillment of the obligations of international importance (in particular, contracts for the study of the seabed) is what management of the holding claims to be a credit of it.

The representatives of “Rosgeologia” believe that the violation of obligations to the banks has a forced nature, associated with the hydrocarbon prices and the COVID-19 pandemic.

Will the Government of the Russian Federation and the main creditors of the organization in the person of Sberbank, VTB and RRDB be convinced by such arguments?