It Became Known What Belarus Gained From Potash Project In Turkmenistan

Belhorkhimprom has been suffering net losses for several years in a row.

The auditors of the Belarusian contractor's report refuse to express their opinion for the third year in a row. The uncovered losses amount to hundreds of millions, banki24.by writes.

Belhorkhimprom reports have appeared in the public domain. This company was the general contractor in the construction of the potash plant in Lebap velayat of Turkmenistan.

The construction of the Garlyk Potash Plant has had an extremely adverse effect on the company's financial condition. The independent auditors of Belhorkhimprom's report have refused to give an opinion on the company's accounts for the third year in a row.

In particular, the auditors of the 2020 report write that they "have found circumstances associated with the presence of significant uncertainties in the activities of the branch in Turkmenistan". These factors "can potentially affect the overall activities of Belhorkhimprom and "raise significant doubts about Belhorkhimprom's ability in continuing to operate consistently".

The auditors note that Belhorkhimprom cannot control the assets on the territory of Turkmenistan. The reason for this is the arrest of the company's foreign currency current accounts in the bank "Turkmenbashy" in accordance with the ruling of the Arbitration Court of Turkmenistan. In addition, the company's property in Garlyk village of Lebap velayat has been under arrest since 2019.

The auditor's report describes the proceedings in the Stockholm Arbitration. As of the date of approval of Belhorkhimprom's accounts, legal proceedings on the claim of the State Concern "Turkmenhimiya" against Belhorkhimprom were underway. The audit statement is dated March 5, 2021.

There are also counterclaims made by Belhorkhimprom against the Turkmens. They are determined by the actual costs incurred in the construction of the potash plant.

According to BelGazeta, the cash received from the Turkmens amounted to USD 716.8 million as of January 1, 2018. At the same time, the Belarusians spent USD 906.3 million on the contract as of the same date.

Belhorkhimprom has been incurring net losses for several years in a row. The auditors report a loss of BYN 90 million for 2020 and BYN 222 million for 2019. As a result, by January 1, 2021, the company's accumulated uncovered loss exceeded BYN 499 million.

The auditors point out that the company has negative net assets. At the same time, Belhorkhiprom's negative net assets only decreased in 2020. On January 1, 2020 this figure was minus BYN 305.6 million, and on January 1, 2021 - minus BYN 396.7 million.

The auditors also note Belgorkhimprom's overdue accounts payable of BYN 257.8 million and "the inability to repay it within the prescribed period".

In 2020, the company's long-term liabilities skyrocketed from BYN 277.4 million to BYN 438.8 million. From 2013 to 2020, the company's average headcount dropped from 940 to 746 people.

As of December 2018, the majority shareholder of Belhorkhimprom with a 50.45% stake was Belaruskali. In turn, Belaruskali is 100% owned by the state.

It is known that in 2016, Belaruskali issued loans to Belhorkhimprom - USD 44.9 million under Loan Agreement No. 1 of 24.06.2016 and USD 50 million under Loan Agreement No. 2 of 22.09.2016. At the end of 2018, the parties rescheduled the loans and agreed on lower interest rates.

In 2015, Belhorkhimprom received support in the form of a BYR 2,758 billion loan. Mikhail Miasnikovich supervised the construction of the Garlyk combine on the Belarusian side.