Jan. 31 (Bloomberg) -- The Republic of Karelia, a region in Russia’s northwest, picked OAO Bank Sankt-Petersburg to help pulp and paper producer OAO Kondopoga avert bankruptcy.
Kondopoga, the biggest Russia’s newsprint paper producer, has debts of as much as 10 billion rubles ($332 million), the Karelia regional government said in a statement on its website today. OAO Sberbank, UralSib, OAO VTB and OAO Bank Vorozhdenie are among the plant’s creditors, while Bank Sankt-Petersburg will manage the debt restructuring and further investments in the Kondopoga’s development, the administration said.
“The bank has experience in anti-crisis management in diversified areas and expects deep improvements at the plant,” the Karelia press service said, citing Alexander Khoudilainen, the republic’s governor.
Bank Sankt-Petersburg is expecting proposals from Karelia officials to manage the factory, said bank spokeswoman Anna Barkhatova. She declined to comment further as the agreement hasn’t been signed.
OAO Kondopoga produced 750,000 tons of newsprint paper in 2012 and claims about 39 percent of the Russian market.
To contact the reporter on this story: Anatoly Temkin in St. Petersburg at firstname.lastname@example.org
To contact the editor responsible for this story: James M. Gomez at email@example.com