Russian companies facing bankruptcy

Started by CrackSmokeRepublican, June 14, 2010, 10:34:57 PM

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CrackSmokeRepublican

Russian companies facing bankruptcy

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Published 10 June, 2010, 17:42

Edited 14 June, 2010, 00:50

About one third of Russian firms lost money in the first quarter this year. Many are trying to negotiate new loans, but the slow economic recovery means covering interest payments is tough.


Russia's only tin producer, Novosibirsk Integrated Tin Works, declared bankruptcy this week – brought down by $40 million debts. It's part of a growing wave of defaults.

The number of companies filing for bankruptcy rose by 15% last year. It's a growing trend, with no sign of a slowdown this year, says Douglas Dwyer, Managing Director at Moody's Analytics.

"Default risk occurs across all the sectors of the Russian economy and default risks are relatively high in Russia relative to other nations that we are watching. It's naturally a natural resources economy so it's vulnerable to oil prices – changes in oil prices."

Moody's Analytics, a world provider of risk management, has been monitoring Russia since 2002 – through the fastest growth of modern times.

Since the financial crisis hit, banks have competed to attract quality borrowers – but this is still an area of concern for regulators, says Robert King, Head of EMEA sales at Moody's Analytics.

"There's increasing focus from governments and regulators on improving risk management as many of the banks around the world including Russia are looking to improve their risk management practices."

Compared to western countries Russia has seen rising default rates in the past few years. But analysts, like Douglas Dwyer, say this is a feature common to economies undergoing rapid change.

"Relative to China the default rates are less elevated, but it is an emerging market and we do see default rates are more elevated in emerging markets throughout the world."

Moody's has constructed a risk calculator for China, which estimates the probability of a company defaulting based on the historical default rate of similar firms. It will release a similar calculator for the Russian market later this year.

http://rt.com/Business/2010-06-10/bankr ... mpany.html
After the Revolution of 1905, the Czar had prudently prepared for further outbreaks by transferring some $400 million in cash to the New York banks, Chase, National City, Guaranty Trust, J.P.Morgan Co., and Hanover Trust. In 1914, these same banks bought the controlling number of shares in the newly organized Federal Reserve Bank of New York, paying for the stock with the Czar\'s sequestered funds. In November 1917,  Red Guards drove a truck to the Imperial Bank and removed the Romanoff gold and jewels. The gold was later shipped directly to Kuhn, Loeb Co. in New York.-- Curse of Canaan