Russia plans $5 bn rescue plan for defence industry

December 8th, 2008 - 7:27 pm ICT by IANS  

Moscow, Dec 8 (RIA Novosti) The Russian government has drafted a rescue package of 150 billion rubles ($5.4 billion) for the country’s defence industry amid the ongoing global financial crisis, a Russian newspaper reported Monday. State-run technology company Rostekhnologii and the United Aircraft Corporation are the main candidates for the government aid, with state companies receiving the funds through a rescue mechanism involving newly issued share purchases, Vedomosti reported.

Russian finance ministry will submit proposals to the government this week on reforming the country’s defence and industrial complex, said deputy finance minister Anton Siluanov who heads the inter-governmental commission to support the sector.

Deputy industry and trade minister Denis Manturov said that the plan consists of five elements: increasing advance payments, boosting funding for state defence orders and federal programmes, subsidizing interest rates and providing state guarantees for loans, as well as preventing bankruptcies and issuing new shares and bonds in favour of the state.

Siluanov said that around 50 billion rubles ($1.8 billion) would be set aside to subsidize interest rates, increase company capitalization and prevent bankruptcies, while 100 billion rubles ($3.6 billion) would be used to guarantee loans.

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