Recent events at the Zaporizhzhia Aluminum Combine (ZALK) can only described as sensational. Avto VAZ-Invest management withdrew its claim vs. Ivan Bastryha forbidden by the Ordzhonikidze District Court to sign any financial instruments, make deals, or sign a labor agreement in 2001.
Recently Ivan Bastryha openly and sternly voiced his objections in principle to Russia’s Avto VAZ-Invest’s presence on the Ukrainian aluminum market as new ZALK owner. He had serious doubts about the Russians’ intention to invest in the combine’s development and modernization, saying that he was being pressured by the Avto VAZ-Invest management, but that his stand remained unshakable: “I’m not afraid to lose my post. I am concerned about what will happen to the aluminum combine. Avto VAZ-Invest has a $4,000 statutory fund and they took a $70 million loan from the Vneshekonombank [Foreign Trade Bank] at high interest. Will the new owner think of developing ZALK with such a huge debt?”
At present, Mr. Bastryha’s has an altogether different opinion. To begin with, he complied with one of Avto VAZ-Invest’s requirements, appointing the Russian company’s vice president Sergei Petrov as ZALK’s acting financial director. After the claim was withdrawn he signed a labor contract for 2001. “Look at Avto KrAZ. They had no money but vied in the tender and are still slowing down things. We had a board meeting, decided on our stand and discussed the agenda. Now let them see us in court. It’s their business. I believe that every owner must think of how to get the money he spent and work it off. To do so, he must think about developing output. I have always said and I still say that the ZALK development program envisaged investment commitments. Avto VAZ-Invest presented them to the State Property Fund. We jointly worked out the commitments and the way these commitments are implemented will depend on the owner, employees, and local authorities. Avto VAZ-Invest has invested $70 million. Can one doubt that the money flows will run anywhere without them taking part? I am sure that it is impossible at the aluminum combine. They are the masters now — well, maybe not formally as yet. But they paid the money. I made up my mind and appointed Mr. Petrov acting finance director. Any further procrastination would sharpen the relationship and sever business contacts with our neighboring state. There must be no deadlock. Cancel the tender? Return the money? How? It’s no longer in the budget,” Ivan Bastryha stressed. Avto VAZ- Invest’s president Arkady Bolshakov stated, “We do intend to develop the aluminum combine. It’s laid down in our investment program and I’d like to point out that we own an interest in ZALK regardless of our corporate relationships not being yet registered. Therefore, talking of any improper approach by us is incorrect. Concerning Sergei Petrov’s appointment as finance director, it is the aluminum combine’s manager prerogative to hire anybody. We do not in any way express our distrust of the ZALK management. We just have to keep a finger on the pulse. This is perfectly logical. Mr. Bastryha has to be credited for keeping ZALK in a good shape. Even though the aluminum combine is regarded as a small business in CIS terms, it remains stable, balanced, and making money. We have worked with ZALK for the past seven years, reviving supplies severed by the Soviet Union’s collapse. Moreover, we find ZALK perfectly acceptable by its characteristics.” Mr. Bolshakov responded to Ivan Bastryha’s statement about being pressured by Avto VAZ-Invest and threats to start a war of compromising information by saying that there were differences between them and Ivan Bastryha, but they were caused by the desire to start controlling the combine’s cash flow quicker. “After all, we reached a consensus logically,” stated Bolshakov. “We arrived at the same conclusion that the privatization process is irreversible.” The new ZALK owner does not reject modernization plans under the Kaiser Aluminum project, saying that the program of transition from electrolysis to burned anode production is effective, both in terms if increasing output and improving the ecological situation. When asked about Avto VAZ-Invest’s allegedly dubious reputation, Arkady Bolshakov replied with a smile, “Indeed, the press wrote that Zaporizhzhia will be flooded by Chechens with our coming and so on. We are not Chechens. Our company has cooperated with the Vneshekonombank and Savings Bank of Russia, two prestigious business entities that would never do business with the underworld.”
