VNESHECONOMBANK CHAIRMAN VLADIMIR DMITRIEV’S INTERVIEW TO TV CHANNEL RUSSIA 24

TV Channel Russia 24
Live Broadcast
02.10.2015, 14:56

Host Nailya Asker-Zade

HOST: The International Investment Forum Sochi-2015 keeps on going and now a guest in our studio is Vnesheconombank Bank Chairman Vladimir Dmitriev. Good afternoon Vladimir Alexandrovich.

Vladimir DMITRIEV: Good afternoon.

HOST: In his address, Prime Minister Dmitry Medvedev talked a lot about steps that would contribute to our economy’s growth, with one of them being import substitution. Does Vnesheconombank participate in processes that encourage import substitution in our country?

Vladimir DMITRIEV: I think that most projects funded with Vnesheconombank’s assistance deal directly or indirectly with import substitution. As import substitution is not an end in itself, we are not going to isolate Russia and act in accordance with the Juche principles, that is, self-reliance. We are developing import substitution keeping in mind that Russia has a sufficient intellectual and industrial potential to provide ourselves with products which we unfortunately still purchase abroad. Vnesheconombank funded such large-scale projects as Tobolsk-Polymer. Vnesheconombank provided about 2 billion dollars for the construction of a major integrated plant to process and utilize associated petroleum gas which is used to manufacture polypropylene, which has been up to now purchased abroad. Vnesheconombank invested significant financial funds in the domestic automotive industry, which manufactures now competitive products with the assistance and cooperation links of such large automakers as Ford, Fiat and Japanese automakers. Such projects include “Ford Sollers”, AvtoVAZ, KamAZ. Vnesheconombank invested in these projects more than 100 billion rubles. There are also other projects but I’d like to stress that as far as import substitution is concerned we should try to find out where small and medium-sized enterprises might want to operate. Providing support for small and medium-sized enterprises is also one of pour top-priority lines of activity. We should support SMEs in such a way that they could get involved in import-substitution projects, in manufacturing high-tech competitive products.

HOST: Vnesheconombank extended guarantees to Transaero and we discussed this issue with you in the Far East, you said that there was no threat of default for Transaero. Now the situation has changed and the company will be declared as bankrupt. Did you expect this to happen?

Vladimir DMITRIEV: There was no threat of bankruptcy when we talked with you but I’d like to stress that efforts made by the state, business, companies and banks with state participation were aimed at changing the situation for the better. As early as last year, Vnesheconombank warned on the basis of information received from its subsidiary VEB-Leasing that the situation with Transaero was unfavorable. Now we know that the situation was unfavorable in many respects for example reporting accounts and financial documents that were submitted to banks and financial institutions, mildly speaking, were not in line with reality. We proved to be victims of such actions. Now we can see that the company is not capable of fulfilling its obligations to passengers and most importantly to banks and leasing companies that extended credits to it. Unfortunately, they failed to implement a project that provided for Aeroflot to receive a 75-percent stake and start to rehabilitate the company through assuming some of Transaero’s obligations. But this scenario also fell through. Now the company’s bankruptcy is one of most likely scenarios. But we should take it easy, at least we shouldn’t overdramatize the situation as bankruptcy does not mean mass layoffs and closing down business activity. We are considering an option of “soft landing” in this complicated situation, an option of managed bankruptcy but I’d like to stress it once more that bankruptcy is one of probable scenarios. We are also considering other scenarios…Our leasing company VEB-Leasing and VTB leasing company have to work very hard. We hold talks with our partners and friends from VTB almost on a daily basis in order to consider an option of establishing a company on the basis of the existing aircraft fleet. And this company could assume additional obligations using mechanisms of state support to transport passengers and service passengers flows. This is an option to be considered in a serious way as we have human resources and managerial potential.

HOST: Let’s hope that the situation will be resolved after all. Thank you very much.