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Russia's major car manufacturer switches to shortened work week

February 15, 11:17 UTC+3 SAMARA
Russia's largest carmaker group Avtovaz was at risk of putting on hold operational activities due to large losses and difficulties associated with the repayment of debt
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© Andrei Kholmov/ITAR-TASS

SAMARA, February 15. /TASS/. Russia's largest passenger car manufacturer Avtovaz announced transition to a four-day work week for six months, the company said Monday.

It was first reported about Avtovaz possible switching to a four-day working week after a meeting of the Board of Directors of the company on November 30, 2015. "The Board of Directors focused on the main areas of improvement and its adaptation to the current market conditions," the company’s press service said.

It was reported earlier, Russia's largest carmaker group Avtovaz was at risk of putting on hold operational activities due to large losses and difficulties associated with the repayment of debt. The auditor - Ernst&Young - said that the losses of Avtovaz amounted to 73.85 bln rubles ($932.5 mln) in 2015 (increasing 2.9-fold), as well as short-term liabilities at the end of the year exceeded the current assets by 67.78 bln rubles ($855.2 mln), which caused the auditor to doubt the ability of Avtovaz to continue its operational activity.

Avtovaz said it breached covenants on more than 43 bln rubles ($542.63 mln) of loans as of December 31 and received waivers from lenders including Rosbank, Garanti Bank Moscow and Societe Generale. The company also noted risks and said it needed shareholder support.

At the end of the year long-term liabilities of the group amounted to 48.9 bln rubles ($617.1 mln), which is 67% more that in 2014.

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