EU-ASIA Business Finance Centre Holding has not managed yet to reach agreement with Armenian government on restarting Nairit plant

ArmInfo. If an agreement is  reached with the Armenian government related to re-launch of chemical  giant Nairit plant, on the first stage 20 mln EUR will be more than  sufficient for re-launching acetylene line of the production.  Chairman of EU-ASIA Business Finance Center Holding Ashot Grigoryan  expressed this opinion answering to ArmInfo's correspondent's  question at today's press conference. He added that after the first  tranche for the plant re-start the second will be made amounted to  nearly 100 mln EUR, which will be invested in recovery of production  of butadiene rubber. 

Grigoryan informed that the European delegation from Slovakia has had  a number of meetings with Ministers of Transport, Finance, and  Energy, as well as with Prime Minister Karen Karapetyan. As a result  of the meeting the Prime Minister expressed readiness to discuss  positive proposals, however expressed his "no". "I did not like that  'no'. Investors should not be told 'no'. For the first time in my  life I see that the government takes a dim view of investors. I did  not expect such an attitude", he noted. 

The Head of the Holding noted that according to the assessment of  colleagues from Europe Nairit may become a modernized production  complex in a short period of time, at the same time the European  experts highly assessed potential of chemical engineering in Armenia.  "We have investors who intend not only to restart production, but  moreover to organize logistics in order to ensure export of the  production to Europe and the markets of other countries, and there  are investors who can ensure sale of the product", he stressed.   Grigoryan also noted that by the Prime Minister's request a proposal  will be prepared considering the results of the discussions. "Most  likely, we will present the proposal to the government in November",  Grigoryan told ArmInfo's correspondent. 

One of conditions of the Holding is to purchase the plant for EUR 1  without any debts. According to Grigoryan earlier when the Holding  had come up with an initiative to restart the plant, the investors  were obliged to pay the debts of the plant, related to this Grigoryan  noted. "We are ready to compensate part of objective debts that are  not stolen funds. But why should we pay for others' crime?"

At the same time he informed that investment projects on North-South  railway and supply of transit Iranian gas were also presented to the  Armenian government. Among other ambitious plans is Armenia's  involvement in the new Silk Road program, the project in which  Georgia, Iran, Slovakia and other countries are involved. In this  context he clarified that the Holding intends to purchase a port on  the coast of Danube, through which the new Silk Road will pass. "We  plan to deliver goods from India, China and Iran to Europe through  Armenia and opposite direction, opening great opportunities for  Armenia", he said. 

It was previously reported that EU-ASIA Business Finance Centre  (Slovakia) is ready to invest up to 150 mln EUR in Nairit Plant. The  holding is registered in Bratislava, the capital of Slovakia. The  company was registered in April 2016 as a company providing advisory  services in the field of business and management.  Nairit Plant has  been idle since April 2010. Throughout six years the Armenian  government responded to numerous appeals of the former employees that  the plant will be re-launched as soon as investor is found.  "EU Asia  Business Finance Center" holding has an Iranian partner who is ready  to provide gas for operation of the plant free of charge as an  investment.  Holding is ready to pay 1EUR for operation of the plant  for 5 years in case it is exempted from taxes for that period and its  debts to state are canceled. 

To note, at the moment the debts of Nairit Plant amount to 50 billion  AMD (about 130 million USD).  The Plant's shares were given as  security against the CIS InterStateBank's 70 mln USD loan provided in  2006 for 5 years - till late Dec 2011 - at 12.5% p.a. In 2006, 90% of  Nairit Plant's shares were sold to Rhinoville Property Limited (UK).   The latter owns an 89,999% stake in the plant, Armenian Ministry of  Energy and Natural Resources - 4,496%, Gazprom Armenia CJSC  (previously ArmRusgasprom) - 3,596%, and Yerevan Thermal Power Plant  - 1,907%. In 2015 the World Bank conducted a financial and technical  audit at Nairit Plant at the request of the Armenian Government. The  WB considers the re- launch of the plant to be inexpedient because it  will need at least $250 mln. But even if investors are found, the WB  experts do not think the product will be competitive, because it will  have a high prime cost. Most experts were saying that the results of  the WB audit can be considered as recommendations to the Plant's  bankruptcy process, which has in fact started.