OREANDA-NEWS. On 26 March 2009 was announced, that Andrey Yashchenko, corporate finance director at Basic Element, spoke with Russian and foreign journalists about the obligations of Basic Element companies to Alfa-bank and restructuring talks with the bank. Below are abstracts from his remarks:

"Media accounts of the consolidated debt of Basic Element to Alfa-Bank are mistaken and the figures incorrect. Companies controlled by Basic Element, including Russian Aluminium, have obligations to the bank of around USD 650 million, half of which are problematic loans, or debt with overdue payments. These obligations are equally divided among all the companies involved and are not guaranteed by the group overall. The principal of the loans is due for repayment this year".

"We believe that the global economic crisis can be considered a significant change of circumstances that allows us to count upon amending existing agreements. We hope that our creditors will view our position with understanding and good faith. We will, of course, carry out our obligations in full; the only issue is in regards to timing. We will not back away from our liabilities and continue discussions with all creditors on the restructuring of our obligations".

"Banks, including Alfa-Bank, are presented with new business models adjusted to the current economic reality, showing them our cash flows for months and years ahead and setting out how we will fulfil all of our obligations within a reasonable period of time. Negotiations are based on these proposals, and we take into account what banks can and cannot accept".

"The restructuring of debts is a relatively standard procedure in developed markets. Many Western companies have gone through restructuring time and time again because there is a clear and transparent process facilitated by specialists who frequently handle such situations. Unfortunately, no such practice exists in Russia, and that makes the whole process much harder for us".

"Despite unhelpful rumours and speculation in the media, talks with Alfa-Bank continue with the goal of reaching an agreement that will enable us to maintain business and jobs. It is in the best interests of all to resolve this as soon as possible. We look for a constructive approach from Alfa-Bank, but the freezing of accounts has a negative impact on the lenders' activities".

"The bank has a wide range of our assets as collateral, including industrial assets, real estate and shares. We are ready to provide assets as collateral if we can agree on acceptable parameters for restructuring. Under such circumstances, we would consider providing any asset as collateral and consider other repayment options, including the divestment of assets, but we cannot give a 50% discount to the liquidation price - that is unacceptable. We are not prepared to do a large scale ‘fire' sale, but we are ready to discuss mutually acceptable solutions".

"For companies with ruble-denominated sales revenues, we would naturally like to get the debt transferred from dollars to roubles. But all of this is part of a single restructuring process and such decisions are not made on a separate basis, only in the framework of general agreements".