Representative Expenses Almost Reduced to Zero from August 2025: HEC

The public relations department of HEC LLC reports that a series of measures have been implemented since mid-July 2025 aimed at optimizing financial operations and reducing inflated expenses.

The company's investment program for 2025 is currently in the execution phase. It includes a special focus on the documented and established credit liabilities towards partner organizations, as well as a comprehensive analysis of the actual situation concerning unpaid work.

Currently, a study is being conducted regarding more than 6.5 billion AMD in advance payments (debtor obligations) available as of July 18, 2025, within the investment program framework. Additionally, mechanisms for the emergence of sold materials to partner organizations amounting to approximately 11.0 billion AMD (debtor obligations), their necessity, justification, or requests for return are being examined.

As a result of the company's operations, partner organizations have already returned 110.0 million AMD in accumulated obligations from previously unpaid rental agreements for special equipment in August-September 2025, and the process is ongoing.

Since July 18, 2025, several open, transparent, and inclusive procurement processes have been announced for purchasing necessary equipment, products, and services to ensure the company's normal operations. Following market research (price quotations), numerous offers have been received from hundreds of sector operators.

For the purchase of cables, connectors, batteries, oils, and other materials required for automotive operations, a total financial plan of 492.9 million AMD was set; however, the actual acquisition was achieved for 315.6 million AMD. Consequently, the company saved over 188.2 million AMD (38.1%) through transparent, inclusive, and open competitive procurement processes for products and services necessary to ensure its normal operations.

As of September 30, 2025, significant changes have occurred in the company’s credit portfolio. At the end of July, its liabilities to international and local banks, as well as issued bonds (including accrued interest), amounted to approximately 396.8 million USD (152.3 billion AMD). Two months after the appointment of the interim administration, the additional financial resources created through the optimization of financial operations, reduction of inflated expenses, ensuring procurement competitiveness, and other factors have been directed towards early repayment of certain obligations, resulting in a decrease in the company's obligations by 15.3 million USD (6.3 billion AMD) to 381.5 million USD (146.0 billion AMD).

Overall, the company has achieved significant financial stabilization and a substantial increase in management transparency in a short period.

As a result of studies conducted for administrative expenses, the company has partially or completely rejected services provided by several organizations by terminating existing contracts or revising pricing strategies and operational effectiveness. Advertising and marketing expenses have been entirely reevaluated since August 2025, leading to the termination of dozens of service contracts that are no longer relevant.

According to the business plan approved at the beginning of 2025, a payment threshold of 77.0 million AMD was set for the period from August to December 2025. As a result of the actions taken, the company will achieve savings of 58.0 million AMD (74%) compared to the planned indicators, including the repayment of accumulated creditor debts (13.0 million AMD).

The threshold set for representative expenses for the period from August to December 2025 in the business plan approved at the beginning of the year was 30.0 million AMD. From August 2025, representative expenses have been almost reduced to zero, and the existing creditor obligations are currently under discussion. Thus, for the period from August to December 2025, including the repayment of accumulated creditor debts, the company will achieve savings of 24.0 million AMD (81%) compared to the planned indicators.

Efforts are underway regarding the need for leased premises, the convenience of location, and pricing policy for rentals of land, property, and equipment. Office spaces serving citizens that were previously rented in properties associated with the Tashir group of companies at significantly higher market prices have been replaced with more justified, efficient, and financially appropriate rental spaces. Although the work is still in progress, it can already be noted that the planned allocation of 356.0 million AMD for this item for the period from August to December 2025 will not exceed 330.0 million AMD, and the savings will amount to 27.0 million AMD (8%).

At the same time, it is worth noting that previously, only one service center’s rented premises had an allocation of 12.6 million AMD per month, while it will now be moved to a space owned by HEC LLC with zero rental cost. In another case, a space rented at 2 million AMD per month will be replaced with a new location, only slightly farther away, with a rental fee of just 400,000 AMD per month.

The results of the efforts regarding vehicle rentals are notably impressive. For the period from August to December 2025, this item is projected not to exceed the planned threshold of 29.0 million AMD, resulting in actual expenditures including the repayment of accumulated creditor debts (11.0 million AMD) totaling 13.0 million AMD, leading to savings of 16.0 million AMD (56%).

In terms of fuel procurement, the company's savings from August to December 2025 is expected to reach 157.0 million AMD (44%), compared to a planned threshold of 359.0 million AMD, with anticipated payments of 202.0 million AMD.

In conclusion, it is clear that due to effective management, the company has already significantly optimized current expenses in a short timeframe, improving the efficiency and transparency of the majority of products and services procurement processes. By the end of the year, it will be possible to save an additional amount of over 283.0 million AMD through the aforementioned expenditure items, with approximately 70.0 million AMD of this figure expected for August-September.