OREANDA-NEWS. November 03, 2009. Andrey Elinson, Basic Element's director of corporate governance, told Reuters Television today that the majority of businesses in the Basic Element group have posted profits since July 2009 and that the group expects to complete the restructuring process by the end of the year.

Basic Element strategy and profitability of its companies

"The Group's strategy hasn't changed. We acquired assets to develop our core businesses. Before the economic downturn it was natural to use loans, which were much cheaper than other sources of financing. Now our businesses' development strategy will be mostly based on our internal resources".

Commenting of the group's profitability, Mr Elinson said "Many of the businesses had already reached profitability by July. By the year end, specifically next year we have targeted all companies to become profitable. They are all marginally profitable now. We're aiming for them to be profitable on the bottom line next year. But we think that most of them are already there".

Restructuring

"I think the restructuring, which has been a long process, started almost a year ago, is at its final stage. We hope to complete the whole process by the year end. We have already seen some of the restructuring contracts finalized, such as the GAZ group where we're already in the process of obtaining government guaranties".

"We've met all the requirements on our end, we've provided all necessary information, but because a large number of parties are involved there are a lot of technical details, but we expect that by the year end they will all be completed".

"The cornerstone of the restructuring is the reliability and integrity of our business model. Once we had decided on and were confident in our approach, we convinced banks that our model is reliable and will provide the necessary funding to repay the debts in the near-mid term future. And that was the key element. The rest is technical".

"Before the economic crisis our assets were valued at over USD 45 bln. And if you compare it with the debt it was a reasonable ratio. When we have restored the earning potential, the debt of that amount is not so much that it would stop us from going forward and implementing our strategy".

Workforce

"We did employ more then 300.000 people. Now we estimate that we are still in that range with more then 250.000. We had to go through a painful restructuring process. There was cost cutting. We are looking at each specific business and we are committed to fulfilling obligations to those who are staying and working with the group".

On the possibility of further redundancies in 2010, Mr Elinson said "The process has slowed down. There will probably be a certain number of redundancies but they will be in a normal course of business. We do not expect anything like the substantial redundancies we have gone through over the last 18 months".