Belarus’ company Belgips has been sold to Russia’s Volma Corporation.
The decision to sell the Belarusian company was formalized by Belarus President’s Decree No. 34 “Concerning public joint stock venture Belgips” passed on 16 January 2014 and officially posted on the National Legal Internet Portal.
The document provides for selling 1,978,075 Belarus-owned shares of Belgips (or 99.5% of the authorized capital of the company) without holding an auction or a contest to Volma Corporation at a market price that was in effect on 1 April 2012, i.e. at the amount of $5.27 million.
The deal was conditioned on Volma Corporation signing an investment agreement with Belarus. The investment agreement provides for the upgrade of Belgips’ production facilities and construction of a plant to produce gypsum-based building materials in the village of Gatovo, Minsk District. In line with the document, the new facilities are to be constructed on a step-by-step basis simultaneously with the development, evaluation and approval of the necessary project documentation at every phase of the works.
The investment agreement provides that at least €43 million will be invested in Belgips by 1 July 2018. Some €24.7 million of that amount is to be transferred in favor of the Belarusian company by 30 June 2016. The investment will be used to upgrade the existing production facilities and construct the new plant.
The plasterboard production line is to be modernized within two years since the investment agreement was signed, with its capacities expanded up to 10 million square meters of plasterboard per year. Apart from that, the plant to produce gypsum-based building materials in the village of Gatovo is to be built and commissioned by 1 July 2018. The plant will manufacture up to 500,000 square meters of gypsum partition blocks, 100,000 tonnes of dry mixes and 30 million square meters of plasterboard per year. The investor undertook not to cut jobs at Belgips until 1 July 2018.
The Minsk City Council will earmark a land plot for Belgips to build and maintain the facilities stipulated by the investment project. The land plot will be provided without an auction and a 99-year lease agreement will be signed. The lease agreement on the land plot at Kozlova Street will be extended till 1 July 2019.
For seven days since the signing of the investment agreement, Belgips will be exempt from the mandatory sale of foreign currency received from non-resident companies for selling its produce. The company will enjoy a number of other preferences. For example, it will be exempt from rental payments until 1 July 2019.
The investors will not be able to use the shares of the Belarusian company at their discretion until they fulfill the obligations stipulated by the investment agreement. If the investors fail to fulfill the obligations, Belarus reserves the right to take back the shares on a non-repayable basis.
The document declares null and void Presidential Decree No. 554 “Concerning denationalization of the state-owned company Minsk Gypsum Plant” as of 29 October 1997.
The document is designed to promote production of gypsum-based building materials. The decree came into force on the day it was signed.