Russian government outlines its criteria for helping domestic businesses
The Russian government has set out key criteria that will be used for the selection of local companies that will be granted huge financial aid and other kinds of official support by the state to help them combat their acute liquidity deficits and other problems caused by the current global financial crisis. According to the Finance Ministry, the volume of the government’s intended financial support is about 325bln.rubs (over $12bln), which will, first and foremost, be given to companies that have formulated their development programs and produce goods/services that are in high demand or which are expected to enjoy huge demand in the future.
Addressing the press corps later after a government meeting on this issue, Alexei Kudrin, the Russian deputy prime minister, who also doubles as the nation’s finance minister, said companies aspiring to get help from the government should meet certain criteria, including having an annual sales volume or goods output valued at not less 15bln.rubs and a workforce of not less than 4,000 employees.
For some industries, such as the agro sector, the selection criteria for potential recipients will be relatively softer. For example, an annual sales volume or goods/services production output valued at 1.5bln.rubs will be more than enough to make an agro company eligible for such financial aid. For obvious reasons, special preferences will be given to companies working in the defense-industrial complex, especially those that possess unique technologies, according to the government’s blue paper. Kudrin has already briefed the Russian president, Dmitry Medvedev, on the government’s intended programs of support for the different sectors of the national economy, notably, the industrial, production, banking and agro industries.
According to the official data disclosed at a meeting of the presidium of the government, which was devoted to this issues, about 300 federal-scale corporations and several leading regional enterprises that are pivotal to regional economies or represent backbone of cities’ economies, have a good chance of making it to the list of potential companies being compiled for the financial aid. The drawing up of the list of companies of regional importance that will be eligible for the state financial support is the prerogative of the regional authorities.
Meanwhile, Kudrin specially drew the attention of potential corporate recipients of the multibillion-ruble financial support to the fact the intended financial aid is neither going to be free nor non-refundable. “The state support will be granted on market terms. It will not be granted free-of-charge nor granted as non-refundable loans to companies, as all credits granted by the government to cash-starved companies during this crisis are to be refunded later by the companies.”
However, there are some certain conditions, under which private companies will not be legally obliged to refund loans/financial support received from the state. One of these conditions is ceding a chunk of company’s stocks to the government, a move, which, in finance minister’s opinion, “will create new opportunities for financing such companies on conditions that will not require them to refund such financial resources to the government.”
Web design,