The Ministry of Economy proposes allocating 12.5 million lei from the state budget to the state-run enterprise “Fabrica de Sticla din Chisinau” (“Chisinau Glass Factory”) for increasing its share capital given its difficult financial situation. A draft Government decision to this effect was published for public debates on particip.gov.md, IPN reports.
The Ministry, which is the founder of the enterprise, in the informative note to the bill says the rise in the share capital is judicious given the current situation of the factory. In August 2016, the Glass Factory stopped work following an accident at the glass melting furnace.
A sum of €5.5 million is planned to be invested for repairing the furnace and developing production. The lack of supplies as a result of the halt in production led to a shortage of funds needed for repairing the glass furnace. The given investments are to be financed with loans and with financial resources provided by the founder.
The enterprise took out a bank loan of €3.5 million that will be used exclusively for purchasing the materials needed to repair the furnace. Currently, the Glass Factory does not possess financial resources for paying the interest rate and fully implementing the investment program. “As a solution for overcoming the situation, the enterprises suggested that the founder should capitalize the factory by increasing its share capital. The money will go to implement the investment program,” the Ministry of Economy explained.
The authors of the draft decision also said that the refusal or delay in the process of capitalizing the enterprise will lead to the suspension of the process of reconstructing the glass furnace. Consequently, employees will be laid off. Also, the contract signed with the company that will perform the reconstruction works envisions penalties for not fulfilling the contractual obligations.
