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Lukashenka approves sale of Minsk Watch Plant to Swiss investor

Alyaksandr Lukashenka, by his presidential edict, has given the go-head for the sale of a 52-percent stake in the Minsk Watch Plant to Switzerland`s Franck Muller Group for around $6.6 million.

When reached by BelaPAN, a representative of the Belarusian enterprise said that the Swiss investor was set to raise its stake to 80 percent in the future.

Under the edict, Franck Muller Group is to acquire 655,423,462 shares worth 30 rubels apiece until 2020 provided that the investor buys an additional 1.2 billion shares in 2010, with the money going toward the company`s modernization.

In addition, the investor will have 1.12 billion shares placed under its trust management for a period of five years.

The edict exempts the Minsk Watch Plant from paying profit tax until 2020.

In accordance with the edict, the enterprise will be allowed to lease a land plot in the Minsk district for the construction of new manufacture and social infrastructure facilities.

The Council of Ministers is to sign an investment agreement with Franck Muller Group whereby the plant would be required to continue the manufacture of watches and keep its brand name, Luch, as well as employ at least 700 people between 2010 and 2019.

Mr. Lukashenka and Franck Muller Group CEO Vartan Sirmakes discussed the deal in October 2009.

While discussing the project, Mr. Lukashenka said, “Private owners ruined the company and the government had to take control over it. But we cannot lose the brand, the company, because the name means a lot just like MAZ, MTZ, and BelAZ.”

The Minsk Watch Plant was put into operation in 1953. In 1996, it was reorganized into a stock corporation.

With an annual capacity of five million watches the plant produced 285,900 watches in the first nine months of 2009. Its inventories stood at 36 times the average monthly output as of October 2009.

The Franck Muller Group was established in 1991 by Franck Muller and Vartan Sirmakes who has owned the company since 2004.

The Swiss magazine Bilan said last year that the company was in dire straits with tax debts amounting to 300 million Swiss franks. Sirmakes reportedly intends to move equipment to Belarus to reduce costs, the magazine said.