Shareholders request restructuring of "KIM" debts to the budget
14/12/20110 views
On December 14, Vitebsk / Diana Kurilo - BELTA /. The shareholders' meeting of the open joint-stock company "KIM" today instructed the company's management to apply to the concern "Bellegprom" for restructuring of "KIM"'s debt on payments to the republican and local budgets. This was reported to a BELTA correspondent by Irina Orlova, Chairperson of the Supervisory Board of OJSC.
As Irina Orlova explained, the enterprise has been experiencing financial and economic difficulties since 2001. In 2010, due to a significant increase in prices for the main raw material for production - cotton yarn - and an increase in tariffs for consumed energy resources, the economic situation at the enterprise worsened. From the fourth quarter of 2010, production volumes began to decline, which led to losses. The enterprise is experiencing an acute shortage of working capital, which does not allow for technical re-equipment, purchasing raw materials, and forces "KIM" to work on tolling orders. Currently, accounts payable exceed Br50 billion, of which 43.5% is overdue.
The Chairperson of the Supervisory Board believes that the enterprise, with state support, will be able to stabilize the economic situation. For example, in September of this year, the production volumes of hosiery products increased 1.8 times compared to the average monthly production volumes for the previous five months, and in November - 2.5 times, while the output of knitted goods increased by 20%.
Restructuring of existing debt is one of the measures to stabilize the financial and economic condition of OJSC "KIM", developed by a working group under the Vitebsk Regional Executive Committee. It includes representatives of the concern "Bellegprom", the Vitebsk Regional Executive Committee, the city executive committee, and the enterprise management. The situation at the enterprise is under the control of Nikolai Domashkevich, Assistant to the President of Belarus - Chief Inspector for the Vitebsk Region.
In a conversation with a BELTA correspondent, Nikolai Domashkevich emphasized that bringing the enterprise out of the crisis situation is the top priority for the local authorities and the concern "Bellegprom". "The unprofitability of a state-owned enterprise that can generate income and provides jobs for about 1.3 thousand people is unacceptable. 'KIM' knows how and wants to work," stressed the Chief Inspector.
Currently, enterprises of the "Bellegprom" concern have started supplying raw materials to JSC "KIM" with deferred payment. Creditors have suspended debt collection on the condition of settling current payments. The enterprise is taking measures to recover accounts receivable, estimated at Br9.6 billion, with specialists from the legal department being assisted by the Vitebsk Regional Economic Court and the prosecutor's office. Trade enterprises of the Vitebsk region have joined in selling warehouse stocks and intend to purchase products from the joint-stock company for Br1 billion in December. Orders for the production of underwear for orphanages and boarding schools have been placed by the Committee for Labour, Employment and Social Protection and the Education Department. The Vitebsk City Executive Committee intends to provide JSC "KIM" with a budget loan in December for the purchase of raw materials and supplies.
According to Nikolai Domashkevich, a critical problem for the enterprise is the shortage of qualified personnel, caused by low wages. In this regard, measures are being taken to increase the tariff rates for workers and highly qualified specialists, and to retain young specialists. "We will provide assistance collectively, and the management needs to mobilise the team, to explain what support the state is providing to the enterprise," believes the chief inspector.
Based on the results of work for January-November, JSC "KIM" produced 8.2 million pairs of hosiery, which is 47% compared to the same period in 2010; the production of knitted goods for January-November of last year was 77%. Products worth $7.7 million have been exported (90%). Sales profitability for the ten-month period is minus 17.7%. Losses from sales are estimated at Br7.2 billion.
The enterprise was founded in 1931 and transformed into a joint-stock company in 1994. The State Property Committee owns 86.8% of the shares in the authorised fund of JSC "KIM", the Vitebsk Regional Territorial State Property Fund owns 12.5% of the shares, the Vitebsk City Executive Committee owns 0.4%, and the rest are owned by individuals and other legal entities. The enterprise employs 1.3 thousand people. "KIM" produces a wide range of underwear and hosiery for adults and children. The enterprise has developed and mastered technologies for the production of knitted fabrics from viscose-polyester, cotton-polyester, and viscose yarn with the addition of elastane. The production of hosiery and circular knitted fabric from flax-containing yarn has been mastered. -0-
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