OREANDA-NEWS. August 14, 2009. Kazanorgsintez should restructure liabilities for nearly RUB 28 bn by the end of 2009, otherwise the issue will arise as to whether the company is able “to continue ongoing operations”, the company said in a statement, reported the press-centre of FINAM.

By year-end 2009 Kazanorgsintez, Russia’s No. 1 polyethylene producer, should repay RUB 27.9 bn to its creditors, the company’s FY08 IFRS financial statement said. The enterprise’s total debt totals RUB 29 bn. Without refinancing measures or changes in debt repayment terms the company’s ability “to continue business as an ongoing concern” is called into question, the financial statement pointed out.

The company’s representative declined to comment. In 2009 Kazanorgsintez’s short-term liabilities (due by the end of the year) tripled. At the end of 2008 the company violated “some restrictive covenants”, the financial statement noted. Because of this RUB 16.5 bn of long-term obligations turned into short-term liabilities, contributing to RUB 4.7 bn that the concern was to repay on schedule in 2009.

Furthermore, it breached the terms for the issue of USD 200 mn bonds (maturing in October 2011) and their holders can present them for redemption now. Two holders of Kazanorgsintez’ bonds told Vedomosti business daily that for the time being they have no plans to demand early debt repayment and are waiting for the company to make restructuring proposals.