Russia warns Norilsk , not expected to liquidate it .
Lynnley Browning
MOSCOW 1996-12-06
Russian Finance Minister Alexander Livshits warned financially-troubled Norilsk Nickel on Friday that it must pay overdue taxes , but analysts said the firm would not be liquidated or that its would assets would be frozen .
" Norilsk really is a big debtor , both to the federal and regional budgets , " said Konstantin Chernyshev , equities analyst at Moscow brokerage Rinaco Plus and a Norilsk watcher . "
Livshits 's words are an attempt to put pressure on the company . "
The official Itar-Tass news agency quoted Livshits as telling parliamentary deputies that RAO Norilsky Nikel 0#NKEL.RUO had to pay its tax arrears and that bankruptcy procedures applied to the metals group .
" If it was an unsolicited statement and a bolt out of the blue , then it obviously means something , " said Christopher Granville , chief economist at United City Bank in Moscow .
" But if it was a response to a deputy 's question that was essentially loaded , then it was the only answer he could have given . "
Russian tax and cabinet authorities , under pressure from the International Monetary Fund to boost tax revenues as a condition for receiving payments of a $ 10 billion , three-year loan to Moscow , have been striking fear into the hearts of some of Russia 's most prominent industrial firms by saying they must pay up or face liquidation .
" They could freeze metal , but it 's not a long-term solution to the problem and would n't put money in the budget , " Chernyshev said . "
I do n't think they would do that . "
Entire social infrastructures in the icy Far North where Norilsk is based depend on the company , and Moscow has said it has no finances to resettle hundreds of thousands of people -- an expenditure which could far outstrip Norilsk 's debts .
Norilsk officials declined to comment .
Analysts said the government , while anxious about Norilsk 's debts , is highly unlikely to bring the nickel , copper , cobalt , platinum and platinum group metals producer to its knees or take measures that could significantly affect output .
But it also wants Norilsk , the world 's second-largest nickel producer , to clean up its act .
" The procedure of bankruptcy will be applied , " Tass quoted Livshits as telling Duma deputies about Norilsk .
It indirectly quoted him as saying Norilsk should first pay salary arrears , which in the past have led to worker strikes .
" It is unlikely that Norilsk will pay these debts in the near-term -- the company will remain a debtor in the near future , " Chernyshev said .
He estimated the company 's regional debts at least one trillion roubles and said 30 percent of the giant Krasnoyarsk regional budget was fuelled by Norilsk money .
Norilsk 's new majority shareholder , Russian commerical bank Uneximbank , has said it is reorganising metal exports through Interrosimpex in order to boost revenues .
But the changes have yet to improve significantly Norilsk 's situation .
" Uneximbank has inherited a mountain and whether or not they climb out and over it remains to be seen , " said one metals source .
Norilsk said in September that it total debts , including unpaid salaries to workers , were 13 trillion roubles .
The company said last month that it had worked out a tax payment schedule with authorities , after regional tax officials threatened to seize some nickel and copper assets .
-- Moscow Newsroom , +7095 941 8520