GAZ automobile producer to repay debt to EBRD

In 2002, the GAZ automobile producer will allocate $10m for repaying itsdebt to the European Bank for Reconstruction and Development (EBRD),general director of the RusPromAvto company Dmitry Strezhnev stated at apress conference in Moscow today. He reported that before 1998, no debt payments had been executed. However,when the new RusPromAvto management started working at GAZ, negotiations ondebt repayment were resumed. In May 2001, an agreement on restructuring thedebt till 2008 was signed. Under this agreement, $17m of the debt will notbe demanded by the creditor if payment conditions for the main part of thedebt are observed. In 2001, GAZ repaid $10m; by the end of August it isplanned to repay $4.5m, Strezhnev pointed out.The GAZ automobile producer received $85m in a credit from the EBRD forupgrading the production of GAZ-3110 cars in 1996. In 1999, the companystopped servicing the credit and started negotiations on restructuring itsdebt, which amounted to $65m at that moment. During the negotiations, GAZtop managers suggested repaying the debt to EBRD by issuing additionalshares or by shares of the Nizhegorod-Motors company, a joint venture ofGAZ and the Fiat carmaker (Italy)..

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