Vega

Company Profile

Vega was the largest Russian radio manufacturer and the primary employer in Novosibirsk Oblast (employment around 9000 persons). In 1991, Vega produced 75% of all household radio equipment made in the Russian Federation. Vega also produced radio stations for armored personnel carriers.

Ownership and Control

The privatization of Vega followed the second option in which enterprise employees received a majority of shares. However, a bank, Russian Credit, eventually accumulated 68% of Vega shares. In November 1995 Russian Credit reported having sold its shares to the Novosibirsk firm Oplot, a member of the Menatep-Impax financial group.

Dimensions of Restructuring

After having acquired a controlling stake, Russian Credit set up a restructuring program. One component of this program was developing production of telecommunications equipment jointly with an Australian company Exicom Corp. Another new project envisaged manufacturing audio cassettes with the use of BASF technology. In 1993-4 Vegal received $4 million in credits for these projects. However, none of the above projects were ever implemented.

In 1993, Vega's state orders were cut to zero, and since then Vega's employment has fallen from 9000 to 4000 persons. By the fall of 1995, the enterprise owed 20 billion rubles to the local budget and was requested further credit to pay its employees' wages.

Vega's latest restructuring plan involves re-orienting production from consumer electronics to wood-processing equipment.



topic Enterprise Restructuring in the FSU