Atommash (until 1991 Soviet Redmash) () is a multidisciplinary engineering company located in Volgodonsk, Rostov Oblast, Russia. It was established in 1976 as a Soviet nuclear engineering corporation. Following privatization and bankruptcy in 1999, the industrial facilities of the enterprise were owned and managed by ZAO Energomash–Atommash, a part of the diversified engineering company Energomash.World Nuclear Association - Russia's Nuclear Fuel Cycle (Updated 31 March 2012)
Since 2015 the company has been part of Atomenergomash, the mechanical engineering division of Rosatom. Its current name is "AEM-technology" JSC "Atommash" branch in Volgodonsk.
History
Soviet period: 1975–1991
On May 22, 1970, a state Soviet committee for the construction of the plant was assembled. On July 8, 1972, official hiring process for workers and engineers started. On August 30, 1975, the first stilt of the Production Facility #1 was erected.
In 1973, the Politburo of the Central Committee of the Communist Party of the Soviet Union made a decision to establish a major nuclear engineering enterprise in Volgodonsk, Rostov Oblast. There were several reasons for choosing Volgodonsk, and above all, the town's proximity to the country's southern deposits of iron and steel. Equally important was the opportunity to utilize the Tsimlyansk Reservoir and the Volga–Don Canal (which connects the reservoir to the Volga) for shipping raw materials, components and assemblies to the plant and delivery of manufactured goods. Russia's internal waterway system made transportation of heavy and bulky items to the regions of the country and the world through the Sea of Azov, the Black and Caspian seas easier and cheaper. Roads, railways and an airport were created in order to support the plant."IA - ATOMMASH" by S. Sadoshenko. Moskva, "Plakat", 1987 (pages 3-6, 10, 38). Library of Congress code DK651.V557 I18 1987
Capacity utilization planning revealed that electricity generated by three hydropower stations of Volgodonsk is not sufficient. Therefore, it was decided to build the Rostov Nuclear Power Plant. In November 1974, the USSR Council of Ministers approved the technical design of the first stage of the industrial complex, which was originally called "The Volgodonsk Heavy Machinery Plant" (VZTM). Main tasks for the construction of VZTM (renamed to Atommash in March 1976) for the period from 1976 to 1980 were determined. Atommash started producing equipment for the nuclear energy industry in 1977. The cumulative power capacity produced by the company reached 3 GW by 1978 and 4 GW by 1979. In 1981, Atommash produced its first reactor for the second unit of the South Ukraine Nuclear Power Plant.
According to the plan of socio-economic development of the region, a whole new city area (the so-called "New City") was built in Volgodonsk in order to support industrial and economical activities of Atommash. Before the construction of Atommash, the population of Volgodonsk was 35 thousand people; in 1981 there were about 135 thousand people living in the city. The expansion of the city area came together with modern residential areas, nurseries, kindergartens, schools, hospitals, shopping centers, cafes and restaurants, laundries, sporting and fitness facilities, theatres, cinemas and more.
The Chernobyl disaster in 1986 and the Dissolution of the Soviet Union decreased the number of orders for the nuclear equipment, and the company had to expand the assortment of manufactured goods.Energomash-Atommash: Company profile
First years of the post-Soviet period: 1991–1994 Like most Russian industrial enterprises, Atommash suffered greatly from the collapse of the Soviet Union. In 1991, the time of the collapse of the Soviet Union, the enterprise did not have enough finances to pay salaries. Orders dropped to 15% of the Soviet era volume. The company had to find customers outside Russia and to produce a broader scope of goods.JPRS report: Soviet Union economic affairs - 10 July, 1991
Bankruptcy of 1995–1999 According to Decree 1546-r dated 30.08.1993,Decree of the Prime Minister of Russia №1546-r dated 30.08.1993 translation 378-r dated 25.03.1994Decree of Prime Minister Chernomyrdin №378-r dated 25.03.1994 translation and 1437-r dated 08.09.1994Decree of the Prime Minister of Russia №1437-r dated 08.09.1994translation of Prime Minister Viktor Chernomyrdin, low-interest earmarked loans were allocated to Atommash in order to preserve its unique facilities and support its development. However, in 1994 those loans have been redirected to commercial structures and only then offered as loans to Atommash, but this time at exorbitant interest rates. For example, from July to August 1994, Atommash OJSC was forced to take commercial loans issued by Commercial Bank Doninvest at 216% interest per annum.Reconciliation Statement of accounts payable by Atommash OJSC to CB DONINVEST - 22.07.1995translation A letter from Commercial Bank "Doninvest" to the Board of Directors of Atommash OJSC - 31.07.1995translation
On 21.05.1996 Viktor Mikhaylov, Russian Minister for Atomic Energy, wrote an official letter D-M-27/4-01 to Vladimir Gusev, the chairman of the committee for industry, construction, transport and energy of the Russian State Duma. In his letter, Mikhaylov says that, according to Instruction P-593ns of the Russian Government dated 04.10.1995, the Ministry of Atomic Energy (MinAtom) made a proposal to the Federal Agency for State Property Management (Goskomimuschestvo), Federal Agency for Bankruptcy Proceedings and the Government of Rostov Oblast to convert the "golden share" into an ordinary stock and keep the unsold shares of Atommash OJSC in the federal property for up to 3 years. However, this proposal was not accepted, and the Ministry of Atomic Energy lost all control over the activities of Atommash OJSC. Hence, writes Mikhaylov, having decided to introduce external management on Atommash OJSC and having declined MinAtom's proposal, the three aforesaid agencies – Goskomimuschestvo, Federal Agency for Bankruptcy Proceedings and the Government of Rostov Oblast – took full responsibility for the future fate of Atommash.A letter of the Minister for Atomic Energy D-M-27/4-01 dated 21.05.1996translation
The financial recovery plan introduced as of November 29, 1995, by the decision of the Arbitration court, brought no results as jobs continued declining and social tensions grew. The Russian Ministry of Atomic Energy proposed the following action plan to save the enterprise: Write off the debt on loans of Atommash owed to the Ministry of Finance of Russia (22 billion rubles), as well as respective interest and penalties as of September 1, 1996. Release Atommash from paying all kinds of taxes to the federal and local budgets from September 1, 1996, to December 31, 1997. Offer an installment plan (layaway) from January 1, 1998, to December 31, 2000, for the current accruals to the budgets of all levels. Sell the unsold 30% shares of Atommash to private shareholders under investment conditions.Letter of the Russian Ministry of Atomic Energy to officials dated 12.09.1996 translation
However, those actions were not taken. The Arbitration court of Rostov Oblast appointed Alexander Stepanov the external manager (bankruptcy referee) of Atommash OJSC. At the time, Stepanov was First Vice President (and, since 1996, CEO) of Energomashcorporatsiya (EMK) JSC, a direct competitor of Atommash. Stepanov's appointment was actively lobbied by Tatiana Gramotenko, the Chief agent for bankruptcy proceedings in Rostov Oblast. Several Founders of EMK JSC were direct competitors of Atommash OJSC, which was a violation of the Russian antitrust law. The audit conducted by the Audit Chamber of Russian Federation showed that in a matter of one year EMK, controlled by its CEO Stepanov (at the same time the bankruptcy referee of Atommash OJSC), managed to buy 10.8% share in Atommash OJSC and more than 40% of its debt, which, according to the competition law, clearly poses a conflict of interest.
Governor of Rostov Oblast Vladimir Chub used the letter of MinAtom of Russia No.03-2739 from 12.09.1996 in Stepanov's interests. In his appeal No.1/6049 to the General Director of the Federal Service for Bankruptcy Proceedings Peter Mostovoy, Chub asks to write off, through the reduction of capital surplus, specific fixed assets and objects under construction of Atommash OJSC for an amount of 878 billion rubles.A letter of Governor Vladimir Chub №1/6049 from 19.09.1996translation This led to a reduction of company's assets, the book value of which has already been drastically discounted. Governor Vladimir Chub had no authority to address the General Director of FSBP Mostovoy with a request to approve markdowns and write-offs of assets, which were a legitimate property of thousands of rightful shareholders, of which Russian Federation with its 30% share was the biggest.
Apart from the reduction of the asset value of Atommash, its workshops and equipment were leased to various limited liability partnerships (LLP) on conditions that were extremely disadvantageous to Atommash. LLPs, owned by the corrupt external management of Atommash, obtained strategic raw materials, components and semi-finished products at extremely low prices. Products manufactured by those LLPs on the territory of Atommash, were sold at a profit for the LLPs, while the damage (losses) was reflected on the balance sheet of Atommash OJSC. Colossal non-core assets and vast territories of Atommash, including agricultural companies with their land, were also expropriated."Atommash is not ours anymore?" / "Soviet Russia" newspaper, №2 (13364) of 14.01.2010 (Russian)
According to the Plan of the Bankruptcy referee of Atommash OJSC Alexander Stepanov, a new company called EMK-Atommash JSC was created (Protocol No.3 of the Meeting of creditors of Atommash OJSC of 22.11.1996). The new company had two founders: Atommash OJSC (85,7% of charter capital) and Stepanov's EMK (14,3%)."A very illusory investor" / "Novaya Gazeta" newspaper, 17.07.2000(Russian) In January 1997, 70% of the assets of Atommash were transferred to EMK-Atommash JSC. Atommash OJSC contributed its liquid assets (fixed assets, current assets, intangible assets) and production assets to the charter capital of EMK-Atommash JSC. Illiquid assets (construction in progress, industrial sites, railways, etc.) remained on the balance sheet of Atommash OJSC. After that, EMK-Atommash JSC stock was transferred to EMK JSC."A taste for bankruptcy" / "Nezavisimaya Gazeta" newspaper, 13.12.2011
Alexander Stepanov, now the CEO of "Energomashinostroitelnaya corporatsiya" JSC and at the same time the Bankruptcy referee of Atommash OJSC, wrote a letter on 05.05.1997 to the First Deputy Minister for Atomic Energy Lev Ryabev, assuring that he had understood the concern of MinAtom about the financial state of Atommash, and therefore suggested to work together to support EMK-Atommash JSC, his new company. In this letter Stepanov tried to convince MinAtom that there was no reason for worries, since the production facilities of Atommash were preserved, technological routines for manufacturing of core production were uninterrupted, and the establishment of EMK-Atommash JSC would not lead to restraint of competition. According to Stepanov's letter, the fact of trading liquid assets of Atommash OJSC for EMK-Atommash JSC stock would give the nearly bankrupt company a chance for a settlement with creditors. At the same time Stepanov, head of both companies, positions liquid assets which Atommash OJSC contributed to the charter capital of EMK-Atommash JSC as long-term investments.A letter of A. Stepanov (bankruptcy referee of Atommash and CEO of EMK) of 05.05.1997(translation)