Macedonia's government backs cigarette maker TKP debt swap.

By bne IntelliNews January 17, 2012
Economy minister Valon Saracini said that there is a consensus in the government that currently the most acceptable solution is writing off the state debt of majority-state owned tobacco processing and cigarette manufacturing company Tutunski Kombinat Prilep (TKP), Kanal 5 TV broadcaster reported. Saracini added that they are currently analysing the other state-owned loss-making companies, but the TKP model will not be applied to them. As recalled, last month the management board of TKP offered a conversion of liabilities, owed to the Macedonian state, into equity. The total amount of debt that had to be swapped was MKD 1.62bn (EUR 26.3mn) and included MKD 1.49bn owed to institutions under the authority of Macedonia's government and MKD 123.7mn owed to a wholly-state owned real estate company. The proposal had to be voted at a shareholders assembly, which was initially scheduled for Dec 30, but took place on Jan 12. However, on Jan 12 the assembly dealt only with the composition of the companys management board. At end-2010, Macedonia's government held a 72.4% equity stake of TKP, and the country's pension and disability insurance fund held an additional 12% stake. The company's net loss has widened 27.8% on the year to MKD 218.8mn in H1 2011, according to data from an interim consolidated income statement published on the website of the Macedonian Stock Exchange.

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