Goltsblat BLP, in conjunction with The Moscow Times, has held a conference on "Practical Anti-crisis Measures: Market trends, refinance, restructuring, bankruptcy, dispute resolution. British and Russian experience"

18.06.2009

The conference was supported by the Embassy of Great Britain in Moscow, the Russian Union of Industrialists and Entrepreneurs (RUIE) and the Association of Corporate Lawyers (ACL), and held on 16 July 2009 at the Ritz Carlton Hotel and was attended by over 150 representatives of Russian big business.

Speakers from the Embassy of Great Britain in Moscow and the Ministry for Economic Development of the Russian Federation outlined the practical measures taken by the governments of the two countries to support their economies during the recession.

Britain came up against the crisis earlier than Russia, of course, and the conclusions drawn could be of help to Russian business. The instruments used throughout the world to combat the crisis are universal ones, so it is important to understand how to apply them and what effect they will have in Russia within the framework of the Russian legislation.

At the conference, representatives of big Russian and international financial institutions, such as Barclays, Evropa, Deutsche Bank, Renaissance Capital, and VTB Capital, spoke about the hottest issues associated with banking during the crisis and about their own vision of how events will unfurl on the financial market.

Goltsblat BLP associates and their colleagues from the London office of Berwin Leighton Paisner LLP (UK) shared their practical experience of resolving the most urgent problems facing business under the current economic conditions, told about specific legal instruments that help minimise the risks involved and offered specific recommendations for optimising company business processes during the crisis.

Andrey Goltsblat, Managing Partner of Goltsblat BLP: “The crisis being felt throughout the world has not, of course, left Russia on the sidelines. Here in Russia we are now feeling the crisis phenomena in business like everyone else. The clients we have spoken to also have problems. The task we have set ourselves today, at this conference, is to share the experience available in the world, particularly in Britain, of battling against the crisis. In our opinion, the main consequences of the crisis consist in violation of obligations. Lack of liquidity naturally means that debtors are unable to pay off their debts and buyers of products cannot pay for their supplies. What can we do? What should be the response to this?

Restructuring of debts is one of the most effective methods of countering crisis phenomena, because the alternative is bankruptcies and litigations.

It is no secret that there are investors prepared to start investing in Russia but are unfortunately unable, at the moment, to evaluate precisely the assets in which they intend to invest. Restructuring is specifically called on to evaluate assets and thus allow investors to make a decision and start investing. It is quite likely that, by the autumn, there will be something of a revival, even though there is much talk about a second crisis wave. After talking to clients and investors, we believe that a certain number of transactions will, even so, make their appearance in the autumn. This will probably not be large scale investment, yet there will be certain key ones”.

Caroline Wilson, Minister Counsellor (Economic and Trade & Investment), British Embassy Moscow: “The crisis hit the UK a few months earlier than here in Russia, so we have experience in effective anti-crisis measures. The crisis has demonstrated how interlinked global economies are and the importance of the UK and Russia relationship, in particular trade and investment ties. It has also highlighted where the Russian and UK governments and businesses can work together, on areas ranging from energy efficiency to an-SME favourable business climate. Through joint work such as this we can enhance the future prosperity of both countries”.

Oleg Fomichev, Director for the Department of Strategic Management and Budgeting, Ministry of Economic Development of the RF: “The financial system will, of course, remain one of the priorities, because it provides for general stability and constitutes the economy’s blood supply. No changes are planned at the moment, the situation in the banking system today being stable, with no liquidity problems. The Government has its finger on the pulse, so to say, and if any action is needed, the Government has provided for contingency reserves in its anti-crisis programme”.

Fedor Prokopov, Vice-President, Russian Union of Industrialists and Entrepreneurs: “...companies have virtually stopped counting on financial support from the government and on cheap credit resources. This is bad for the economy but good for survival of the companies, which are refocusing on their own internal resources... Business is trying to survive under the current conditions by means of additional competitive advantages and at the expense of other businesses”.

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