Did I say I'm not under heavy propaganda? Actually the only thing I accept from our media is the result of football matches. But I watch BBC, VOA, CNN etc. And they show everything about Iran so big that you can't ever imagine. Two days ago, they said that IranKhodro, the ME's biggest car manufacturer is bankrupt. But my uncle works there and there is no sense on bankruptcy.
At last "I" know that I'm under heavy propaganda. You even don't know that.
Today, Iran Khodro Co. (IKCO) is on the verge of bankruptcy. The general annual meeting of the shareholders of IKCO was held on Saturday, with Mr. Roghani, a member of board of directors, presiding.
The chairman of the IKCO Board of Directors, Manouchehr Manteqi, who was also the companys former managing director, was expected to preside over the meeting. However, he failed to attend and Roghani was his replacement.
During the meeting, IKCO Managing Director Mohammed Javad Najmeddin released IKCOs fiscal statements for the last Iranian calendar year 1387 (March 2008-March 2009). Based on the annual report, the total annual cost for the company amounted to 940 billion tomans ($940 million) and the forecast for the 1388 cost is $950 million.
Najmeddin said that the accumulated loss for last year amounted to $123 million. However, to compensate for this loss, he forecasted a profit of $110 million for the current year.
He added that due to the loss, IKCO was unable to pay dividends to its shareholders. Jamshid Imani, the deputy director in financial and economic affairs, told Mehr News Agency that according to the Iranian law if a public shareholder company loses money it is not allowed to pay dividends to its shareholders, even from its savings.
In order to avoid mass selling of IKCO shares and retaining its popularity in the stock market, and not breaking the law, the deputy left an option for the shareholders. Imani said that for the purchase of each IKCO vehicle the shareholder will receive a discount of ten to twenty tomans per share in the value of the car. In case the shareholder decides not to make a car purchase he will be provided between ten to twenty tomans per share in cash.
Shares of IKCO in TSE were traded for 138 tomans on Sunday. Ten to twenty tomans per share account to 7 to 14 percent per share.
Najmeddin also announced that the company plans to introduce eleven new vehicles, most of them will be produced under the license of foreign factories or the domestic models will just have a face-lift. Therefore, Najmeddin added that there wont be much additional cost for the auto maker.
After meeting panel
Shareholders asked the directors the rationale behind introducing new models when the company is running up loss. One of the directors responded that based on Iranian law, which encourages automakers to improve the quality, IKCO has to optimize the technology, improve vehicle utility (e.g. mileage), and make the cars competitive.
The Money Credit Council of Iran has accepted to inject $1 billion into IKCO this year. However, the total IKCOs debts and financial commitments amount to over $9 billion, mainly to public banks, according to the economic daily Sarmayeh. The daily added that this debt is more than nine times the companys registered capital assets, signifying that the company is effectively bankrupt.
In order to meet its financial obligations the company has announced plans to sell IKCOs shares in Parsian Bank. IKCO owns one-third of the banks shares with an estimated value of about 500 billion tomans ($500 million). Imani added that the company also plans to auction some 50 subsidiaries which are non-strategic, without naming them. He estimated that some one billion dollars can be raised this way.
Another plan in the pipeline is to convert some $2 billion in short-term liabilities with state banks into long-term liabilities. Imani added that the company is applying for more loans from banks in order to survive the financial crisis.
The Iranian goverment wont let it go bankrupt.