MAZ and KamAZ merger postponed
Belarus believes that Belarusian automobile manufacturer MAZ and Russian KamAZ could merge into a single holding Rosbelavto on equal terms only. Russian enterprise’s capacity and capitalization is significantly higher, therefore chances of the deal closure on Belarusian terms are low.
“We have a firm agreement [with Russian President Vladimir Putin – Ed] that if we merge assets it will be 50/50 with the corresponding management. However their management [Head of Rostechnologia Sergey Chemezov – Ed] is unhappy with 50/50. They want a controlling stake and say Belarus is asking for too much. Well, good, if it is too expensive, then do not accept”, President of Belarus Alexander Lukashenko said during June 14 meeting with the President of Bashkortostan Rustem Khamitov. Simultaneously, Alexander Lukashenko emphasized that Belarus was not intending to compete with KamAZ.
“Why should the holding company, which will include a variety of companies with different market capitalization and other factors, be created on equal terms? The resent assessment of MAZ by Ernst & Young was USD 800 million and KamAZ – USD 3 billion”, Andrey Tretelnikov, an analyst with Rye, Man & Gor Securities commented on Lukashenko’s statement. He noted that MAZ’s future was dependent on the Russian market, and that the Russian authorities had wide opportunities to deny access for Belarusian manufacturer to the market: by introducing additional environmental requirements or amending utilization fees. At the same time it could be anticipated that if the deal is not closing now, in the future, if crisis occurs, the Russian government could theoretically offer assistance to Lukashenko in exchange for MAZ shares.
For reference. The JSC MAZ is among the five largest public companies in Belarus except for banks after Beltransgaz, Naftan, Mozyr Oil Refinery and Belaruskali. In 2011 the company’s sales revenues were USD 1.266 billion, net profit – USD 340.4 million. An average rate of Br 6075.94 per USD has been used for calculations (taking into account the shadow segment of the currency market and our own assessment). In 2011 the average number of employees was 22.227 workers.
The Labour and the Tax Ministries are considering the possibility to include persons engaged in some economic activity without forming a legal entity in the social security system. When the decree No 337 comes into effect, the number of private entrepreneurs is likely to reduce due to the possibility of reducing the tax burden when switching to a tax payment as an individual. 95% of self-employed, including PE, pay insurance premiums on the basis of the minimum wage. The number of self-employed citizens is expected to increase, the number of insurance contributions to the pension system from PE will decrease, the number of citizens who will pay a fee to finance government spending will decrease by several tens. Self-employed citizens have the alternative not to pay social security fees and save resources for future pensions, which, given the gradual restriction by the state of pension requirements could be a more long-sighted option.