Working capital shortages caused by increased activity (167 words)

Published: 10/18/2001

Increased activity at KVZ has resulted in the company taking out a $3m eight month credit facility from ОАО International Saint Petersburg for working capital, particularly for the purchase of components for the final assembly of helicopters. Additional funding is reportedly expected to the tune of $7m for further contracts from negotiations currently underway with the bank. The St Petersburg-based bank has close relations with the Tatarstan Government and was recently confirmed as the financial partner in the FLK leasing vehicle for large commercial vehicle. KVZ has been short of capital for some period of time and attempted to raise $100m from a combination of the St Petersburg's Baltoneximbank, underwritten by Aviaexport and banks in Tatarastan in autumn 2000, but raised only $30m. The money was needed for the completion of an Indian order valued at $170m for 40 Mi-17s that started deliveries in later October 2000, which were expected to be completed in 2001.

Article ID: 2836