ROSTOV-ON-DON, December 26 - RAPSI, Yulia Nasulina. The Rostov Region commercial court on Monday postponed its hearing of VTB bank's application for the bankruptcy of Taganrog Motor Works (TagAz) until December 30 , the court told RIA Novosti.
"The court has declared a recess until the Moscow Commercial Court has considered the TagAz application for entering into a settlement agreement with VTB," the source said. The bank did not object to the delay.
After TagAz's output plummeted by a factor of three in 2009 it accumulated 20 billion rubles ($640 million) in debt to its lenders. The next year TagAz agreed to reschedule the debt with all the banks except VTB. Its liabilities to VTB stood at 5.8 billion rubles ($185.5 million).
In 2010 VTB filed several lawsuits against TagAz to recover the debt under its loans: 726 million rubles ($23.2 million), $38.6 million, $70 million, $60 million and 774 million rubles ($24.7 million). In addition, VTB obtained a court order to l foreclose on the plant's mortgaged machinery and equipment.
In July TagAz secured a deferral until late December regarding repayment of the 726 million rubles ($23.2 million) owed to VTB and a deferral of its debt repayment instalments until December 2012.
VTB applied for the bankruptcy of TagAz in September.
TagAz was founded in February 1997. It began working with with South Korea's Hyundai in 2001.