ANNOUNCEMENT 24 Jul 2013In July 2013, the government of the Russian Federation announced a change in private-sector financial support.
NUMBER OF INTERVENTIONS
On July 24, 2013, the Government of the Russian Federation approved (according to Directive No.1301) state guarantees fully covering the loans of defence enterprises who are contractors of the Russian government. As a result, a group of four defence enterprises are provided 5 state guarantees for a total amount of RUB 20.7 billion (USD 0.63 billion).
This state measure has the goal to expand the capacity of the defence enterprises to attract external sources of funding and carry out public contracts for which the federal funding is received only as deferred payments. A further advantage provided by the state is that the defense enterprises will not be required to put up additional collateral.
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries.