Bogdan Motors announced a record drop in production and the beginning of bankruptcy proceedings
The conditions in which the machine-building industry of Ukraine survives today are the most unfavorable over the past two decades, and the past year has become a record year in terms of a combination of unfavorable factors for vehicle manufacturers, ”Bogdan Motors said. This happened due to a combination of systemic problems in the industry, in the country's economy and due to the global crisis caused by the COVID19 pandemic.
"The machine-building industry, as expected, has become the" Cinderella "of officials and legislators, since not a single bill to support and develop domestic production has been adopted," Bogdan Motors noted.
Ukrainian automakers have not received access to cheap finance, which could significantly increase the production capacity of enterprises and increase working resources. Getting loans to ensure the fulfillment of government orders is still a problem.
“Instead, the state is doing everything so that the loans already received are questioned. For more than a year, the Economic Court of the city of Kiev has been considering a case on appeal against the novation agreement concluded between JSC Ukreximbank and JSC AK Bogdan Motors. The prosecutor's office is delaying the consideration of this case, since they lack at least some kind of argumentation, but the negative noise in the air remains, "the corporation said.
Government purchases have also been significantly reduced and have no development dynamics. This year, the Bogdan Motors company actually closed a plant in Cherkassy, which produced automotive equipment for the Ministry of Defense of Ukraine. Now the workshops of this enterprise are empty, and highly qualified workers have been laid off.
As a result, the company's revenues dropped significantly. This is clearly seen from the volumes of taxes and other contributions paid by Bogdan Motors to the budgets of all levels. For example, in 2019, the total amount of taxes and fees paid amounted to more than 384 million hryvnia, and for 11 months of this year this figure barely exceeded 120 million hryvnia.
Lenders also refuse to meet borrowers halfway during a pandemic. At the end of the fiscal year, one of Bogdan Motors' creditors filed an application to open bankruptcy proceedings. On December 23 of this year, the Economic Court of the Dnipropetrovsk region opened proceedings on the bankruptcy case of JSC AK Bogdan Motors.
"The announced January lockdown in Ukraine has every chance to finally bury the Ukrainian economy, since apart from loud statements that only increase panic and expectations, no systemic steps are taken to support the manufacturing sector of the economy," Bogdan Motors summed up.