January 21, 2014. Sverdlovsk Region Arbitration Court processed Russian Magnesium’s trustee in bankruptcy D. Seleznev’s petition on terminating the trusteeship, declaring the company insolvent, and going forth with the bankruptcy proceedings.

Now Russian Magnesium was set up in 2004 in order to put up a new magnesium-producing plant in Asbest. The projected capacity was estimated at 70,000,000 kg of magnesium and 90,000,000 kg of precipitated silica a year. OOO Solimag owned by an American businessman Mark Lisnyansky controls 50% plus two shares of the company’s authorized capital, 25% minus eight shares are controlled by OAO Uralasbest, 25% minus four shares belong to Sverdlovsk Region Government, and two shares belong to the Swiss Minmet Financing Company.

Russian Magnesium representatives first filed for bankruptcy in September 2012; as of June 30, the company’s book value was 3,29bn RUR, while its debts amounted to 2.26bn RUR.

According to the trustee in bankruptcy’s claims, it is impossible to go through with a trusteeship procedure at Russian Magnesium because no measures were taken in the legally prescribed timeframe to restore the debtor’s paying capacity. Russian Magnesium cannot make any profit from its activity as it does not have the assets necessary to engage in this activity. At the moment, the construction of the facilities is only a plan that will require more than 13bn RUR and eight years to implement, while the payoff period comes to five years. This means the implementation period is thirteen years, provided that the financing comes in.