By David Stepanyan, Yerevan. Exclusively for Vestnik Kavkaza
Armenian Prime Minister Tigran Sargsyan said in late February that Rosneft (Russia) was ready to invest in the construction of a new factory at Nairi for $500 million. Sargsyan and his Russian counterpart Dmitry Medvedev and Rosneft President Igor Sechin reached such an agreement in Sochi. The state company and an unnamed investor agreed to finance an investment program developed by Jakobs, an international company, to modernize Nairit. The sides are working on technical details of the investment projects, place for construction of a new tire factory, its links with Nairit, necessary legislative procedures and benefits. In Sargsyan’s words, the government of Armenia will grant the investment program for Nairit status of a free economic zone.
Talks about the merging of Nairit and Rosneft started between Igor Sechin and the Armenian government in Yerevan in late 2013. As a result, Rosneft, Pirelli Tyre Russia S.p.A., Oil Techno and the Armenian Energy Ministry signed a memorandum of understanding and formation of a joint venture to produce butadiene-styrene rubber. Rosneft investments and Pirelli projects in advanced rubber production will help open a modern facility to produce high-tech eco-friendly tires in Nairit. However, the project faces problems rooting from the debts and bankruptcy of Nairit.
Nairit has accumulated a debt of $400 million, despite being closed down since 2010. 90% of the factory’s shares were sold to Rhinoville Property Limited (UK) for $40 million, 10% belong to the government of Armenia. Rhinoville Property Limited received a loan of $70 million at the CIS Interstate Bank. The bank granted the company $90 million more in 2009 and $10 million in 2010, making a total of $170 million. The factory was shut down in 2010 but its owners have not paid a cent to the bank. The factory generated a debt of $400 million together with the interest rate and overdue penalties, becoming bankrupt. It is noteworthy that the owners of the factory have not only failed to launch the factory after receiving the loan, they also owe workers salaries for 12 months.
There is little chance that Rosneft would pay the debt of $400 million. The grave situation around the crown jewel of Soviet industry will only be clarified after the Armenian government gives guarantees. Rosneft needs to put Nairit on the asset list in order to revive the chemical giant.
The Dashnaktsutyun fraction at the parliament proposed formation of a temporary commission to study the causes of the Nairit debts. The republican majority rejected the idea and believes that it would be a better idea to tie it with Rosneft talks. Considering the formation of an independent commission for Nairit would give many answers, Dashnaktsutyun published a statement about credits and offshore companies and demanded the parliament majority to give answers.
Millions of dollars from the CIS bank were certainly received under surveillance of the Armenian government, owner of 10% of shares in Nairit, and the loans for the closed down factory were affected by frauds and machinations causing the bankruptcy. The prime minister has recently tried to deny accusations of Armen and Ashot Sarkisyans for purposeful bankruptcy of the facility. He said that he had had nothing to do with machinations in 2006 when he had been President of the Central Bank. The rebuttal seems rather languid because the prime minister’s skills in financial operations and ability to “cover things up” are legendary.
