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Gazprombank's $109 mln action against smelter finally dismissed

11:37 13/03/2012

MOSCOW, March 13 - RAPSI. The Sixth Commercial Court of Appeals upheld on Tuesday the lower court's December dismissal of Gazprombank's lawsuit against Amurmetall to recover $109.4 million.

The litigation has arisen out of borrowings. The parties entered into three loan agreements in 2005 and concluded two more in 2008.

Amurmetall entered into a settlement agreement with its creditors, including Gazprombank, in December 2009 as part of its bankruptcy case initiated in June by the Khabarovsk Territory Commercial Court.

Under the settlement, the company agreed to repay its debt to the lenders based on the amortization schedule. The amount claimed by the bank under the bankruptcy procedure was equal to the amount claimed in its lawsuit.

The bank admitted in court that the settlement agreement is being implemented. However, the lawsuit is not intended to have it terminated, but to exercise the right to accelerate repayment if the security for the loans are not provided as agreed.

The bank believes that there is a repayment risk given Amurmetall's financial and business condition. Under a due diligence report, Amurmetall fails to perform such settlement provisions as traders selection through bidding and ignores tolling when it sells products at market prices. Neither has the smelter pledged its equipment to the bank yet.

Amurmetall is the only Russian electrometallurgical works in the Far East. It smelts steel for bar-rolled stock and flat products. The company suspended production due to a lack of operating capital and the unfavorable global situation in May 2009. Although it resumed functioning in July, it underutilized its capacities for a long period.

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Gazprombank's $109 mln action against smelter finally dismissed

11:37 13/03/2012 The Sixth Commercial Court of Appeals upheld on Tuesday the lower court's December dismissal of Gazprombank's lawsuit against Amurmetall to recover $109.4 million.
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