The state of events at Yekaterinburg Meatpacking Plant makes things very complicated for its creditors. ‘From the legal viewpoint, loans are given to a particular legal entity and not to the company’s General Director; this is why this legal entity must be held responsible for their financial liabilities. The banks are trying to minimize the risk of not getting their money back through collaterals and guarantees. However, the credit record of Yekaterinburg meatpacking plant is not very good, so, given the existing risks, the creditors might insist on the early repayment of the debt as they are afraid that the new management might sell the company’s assets in order to reduce its hypothecation value,’ Konstantin Selyanin, Director of Accord Invest Investment Company, said to UrBC representative.

UralTransBank is one of the plant’s largest creditors, and, ‘in this kind of situation, it loses the possibility of giving loans to other businesses; in addition, some damage is done to its reputation. Most likely, the bank will get its money back but it will also lose time negotiating or selling the company’s assets,’ Mr Selyanin said.