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By Anatoly Medetsky
Creditors of Dalenergo elected an external manager for the Primorye's debt-ridden energy utility Dec. 1, but officials say the procedure unacceptable. The Territorial Bankruptcy Agency recommended and the creditors approved Alexander Kanchin as the external manager of Dalenergo, whose arrears amount to over 4.7 billion rubles ($254 million). The vote to avert bankruptcy via a conciliatory agreement fell short of the 300 million rubles ($16 million) needed to carry, according to Alexander Gelbakh, Dalenergo's press secretary. Creditors voted according to the amount of debt they were owed. However, the issue will come to a head Dec. 16, when the Primorye Arbitration Court is slated to pass its resolution on the expediency of external management. If the court finds it appropriate, it will also say whether Kanchin is the man for the job. Primorskugol coal corporation initiated a bankruptcy procedure against Dalenergo in July because it didn't receive payment for its coal. To date, Dalenergo owes Primorskugol 301 million rubles. The upside of external management is that it would place a moratorium on all debt payments by Dalenergo, while the company will still be able to collect debts and pay worker salaries. However, such an arrangement would leave creditors such as Lutek coal mining and energy company, Primorskugol mining company, and various transport firms facing bankruptcy themselves. The companies would be in trouble if they got no money from Dalenergo and yet had to pay their taxes. "What is the most frightening is that the chain of bankruptcy may leap over to other companies. ... As a result, the entire region may end up as bankrupt," said Regional Fuel and Energy Department Chief Alexander Zankov. Like creditors, many companies that are in debt to Dalenergo may be declared insolvent. Money owed to Dalenergo is almost as much as its arrears and the external manager will try to bankrupt company's defaulters to recover the debt. This may lead to another series of bankruptcies, warned Dalenergo General Director Vasily Poleshchuk, whose role in the new management hasn't yet been determined. "In our turn we will make our debtors bankrupt," Poleshchuk said. "This will form a chain in which all of us will be bankrupt." Primorye Gov. Yevgeny Nazdratenko expressed his categorical disagreement with the attempts to use the bankruptcy procedure against Dalenergo, his press secretary Natalya Vstovskaya said. Nazdratenko believes bankruptcy of the Primorye energy system is especially dangerous now when the region is struggling through the winter. External management, conceived to bolster a company's chances of survival in a critical situation, has been ill-implemented in Russia, Gelbakh said. "Practice in Russia shows that external management in 80 percent of the cases dooms a company to a full-scale bankruptcy and selling off." However, Gelbakh tried to put the best face on Dalenergo's future. "To make a life-support, backbone industry in Primorye bankrupt is hardly possible," he said. "Maybe we'll be among those 20 percent that survived."
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