UAH 40 million of wage arrears paid to Electrovazhmash

Today, March 2, 2021, SOE Electrovazhmash fully repaid wage arrears (it was in arrears for part of December and all of January). Enterprise’s management with strong support of the State Property Fund attracted necessary funds, despite billions of hryvnias in debt (in the form of default loans and debts to suppliers accumulated by the previous management in 2018-2019).

Currently, a program is being implemented to stabilize the activity and bring the enterprise out of the deep economic crisis due to lack of working capital.

The stabilization plan includes the restructuring of problem loans (one of the two loans has already been taken out of default and began to be serviced by the plant), attraction of the necessary working capital and significant increase in margins across the main product lines.

“The plant has all possibilities for normal work, so that people have work and fair, timely wages. The only reason for the dire condition of the plant is complete lack of working capital for the purchase of raw materials. But it is difficult to raise the necessary funds exclusively through traditional banking instruments due to the existing historical defaults. Therefore, the management is working with customers to improve payment discipline and seek financial assistance from other companies. The final solution of the situation will take some time, but let’s hope that this delay in the payment of salaries was the last,” Denys Kudin, Deputy Chairman, commented the situation.

Over the next two months, the company should receive approximately UAH 340 million from indexation under contracts for the supply of products for Ukrhydroenergo in 2018-2020. This indexation was provided for in the relevant contracts, but was not previously paid. Now the corresponding amount and supporting documents have already been agreed upon at the management level of both companies and are under final approval by the EBRD, as the main lending institution.

Electrovazhmash also actively works with domestic clients. The commissioning of the Kanivska HPP unit was successfully completed under a contract for the amount of UAH 50 million. For the first time in 5 years, Electrovazhmash is being certified for Ukrzaliznytsia, which will allow it to take part in modernization and renewal programs for rolling stock, and also get more domestic orders.