The extraordinary general meeting of Belarus’ Mogilevkhimvolokno has approved incorporation of privately-owned Belpak, a company representative told the press.
The meeting approved the purchase agreement; the sum of transaction was not revealed.
Joint venture Belpak officially ceased to exist on June 1, 2007, when its stock was cancelled. Belpak was transformed into private unitary company to linger until the moment Mogilevkhimvolokno incorporated it.
Belpak was established in 1991. Mogilevkhimvolokno used to control 45% in Belpak, Itera’s Polyester Holdings controlled 50%, and Mogotex 5%.
Belpak’s facilities are based on the production site of Mogilevkhimvolokno, which provides raw materials for Belpak. Over the past nine months Mogilevkhimvolokno has been selling Belpak’s output, which, according to Mogilevkhimvolokno, stands behind a rise in sales volume and efficiency.
Mogilevkhimvolokno believes the incorporation of Belpak is a logical step towards an integrated processing chain. Production cooperation is expected to further enhance efficiency and cut the tax burden.
Belpak’s polyethylene terephthalate production remains the largest in the CIS.
According to specialists, Itera agreed to sell its stake in Belpak due to the poor financial status of the company and attempts of the Belarusian side to raise its stake in the joint venture to over 50%.
Itera had insisted that Belarus repay its debt to the Russian investor, amounting to 11.45 million euros, as well as the 2.9 million euro loan.