The Russian automaker GAZ Group continues talks with the US Office of Foreign Assets Control (OFAC) of the US Treasury on lifting of sanctions that should come into force in July 2019, a company’s spokesperson told TASS on Monday.

 

 

Tuesday 04/30/2019

The GAZ Group "is still in the negotiating process [with the US Treasury concerning the possible lifting of sanctions]," the spokesperson said.

 

Russian businessman Oleg Deripaska who controls GAZ Group told Bloomberg earlier that the company might go bankrupt and could be nationalized because of Washington’s sanctions that are going to come into force in July. He is confident that in this case, the company would have no chance to survive since many suppliers and partners have already stopped operations with it due to the risk of secondary sanctions. Deripaska has also claimed he is ready to reduce his share in GAZ Group as he did with En+, thanks to which the US removed the restrictive measures against Rusal.

 

The parties will manage to clinch the deal, experts say. "I do not think sanctions will carry into effect. Fairly active negotiations are underway from the last year already. I do not consider the issue of nationalization in principle. Nobody needs this at present. Probably, a state-owned player may become a shareholder in an extreme situation, for example, a bank with the government participation. However, this is not nationalization. This is like an interim measure, an extreme measure. I hope nevertheless that it will not come to this," Igor Morzharetto from Autostat says.

 

The issue with the US Treasury Department will be probably settled, Mikhail Ganelin from Aton says. "Nobody wants to make the enterprise bankrupt, even those imposing sanctions," the analyst noted

 

"The only way to prevent the automaker’s bankruptcy is to reduce the stake held by [Oleg] Deripaska in the authorized capital of the plant, like for En+, in exchange for sanctions lifting, or GAZ nationalization with concurrent provision of financial subsidies by the government," Sergey Suvorov from BCS Premier told TASS.

 

The company’s action plan in the situation of sanctions imposed earlier by the United States on GAZ contemplates promotion of localization and the auto parts market, Vice President of GAZ Group Elena Matveeva said before. However, no decisions and actions on this matter were taken despite meetings and discussions in the government, she added.

 

 

Source: TASS

 

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