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. Last Updated: 07/27/2016

Candy Makers Hungry for Soft Loans




Several of Moscow's largest confectionery and cookie makers are hoping to pry 400 million rubles ($16 million) in soft loans out of City Hall to help tide them over until Russia's economy improves, city officials and industry representatives said.


The city either controls outright or owns a stake in the factories, which are hoping to get cash to use as turnover capital or for restructuring.


"The financial crisis wiped out our turnover capital," said Pavel Cherepanov, a board member at Krasny Oktyabr confectionery factory. "We're in a tight situation because this is the off-season for sales, so we need the help."


However, Moscow officials were more cautious about the prospects of cash-strapped City Hall finding some spare change for the candy makers.


No firm decisions have been made about terms and conditions, although some assistance is likely, said Gennady Pechkisov, head of City Hall's industrial development program. "Maybe [Moscow Mayor] Yury Mikhailovich [Luzhkov] made some promises to certain people during a meeting, but we don't have anything in writing telling us to arrange the loans," he said.


Financial assistance could come from "unexpected" budget revenues or be arranged through either tax credits or as guaranteed bank loans.


In addition to Krasny Oktyabr, Rot Front, Babayevsky and the Bolshevik biscuit factory are among the enterprises lining up at the mayor's office, cap in hand, according to local news reports.


The Moscow government has long had an "economic development" line item in its budget, but it has had to curtail spending after last year's ruble devaluation made it harder for City Hall to service its large hard currency debts.


Analysts said Moscow's confectioners were hardly the most needy cases for scarce government money, but as potentially profitable flagship enterprises, they had a powerful in with the city government.


"Just because there is no money, doesn't mean there is no money whatsoever," said Yury Korganyuk, a political analyst with the INDEM research center. "If it comes down to making a choice, it just means somebody someplace else won't get the money - a lot depends on who is lobbying for it."