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Economy
03 August 2021, 19:22

Step-by-step algorithm for financial rehabilitation of Belarusian state enterprises worked out

MINSK, 3 August (BelTA) – A step-by-step algorithm for the financial rehabilitation of enterprises has been worked out, BelTA learned from Belarusian Deputy Economy Minister Tatiana Brantsevich.

All the program documents of the country specify measures to improve the effectiveness of the public sector enterprises and measures to financially rehabilitate them. A plan on reducing their debt burden has been worked out by the government this year in order to make this work systemic.

A considerable amount of work has been done. All the public sector enterprises have been structured depending on their solvency and financial results and have been separated into groups. A work algorithm and possible solutions for resolving the debt problem have been worked out for each group. “Instead of simply passing down an order to reduce the debt burden we've stipulated steps on analyzing an enterprise, putting it into this or that group and we've offered a set of tools to restore solvency,” Tatiana Brantsevich said.

Speaking about results of the analysis, the deputy economy minister stressed that the debt burden problem is not universal, more than half of the examined enterprises can service their debts on their own. “The accumulated debts do not slow down their operation. You have to understand that if an enterprise borrows money and increases earnings, the loan represents an investment in development. If debts rise with no returns, then we have a problem,” she noted.

Apart from that, the implementation of the worked out measures will be closely monitored as well as the financial state of the enterprises.

“Many enterprises need a bit of polish for their business processes in order to secure stable operation. Approaches to their routine operation need to be analyzed, costs need to be optimized, target markets need to be reviewed, and so on,” the official noted.

According to Tatiana Brantsevich, a small group of enterprises (about 14%) need additional decisions. Efforts will be put into resolving the problem of their debts to banks and other creditors. Insolvency procedures will be used. Reorganization, shutdown of enterprises, or their sale to an investor will be considered in some cases.

Summing up what had been said, the deputy economy minister noted that some progress had already been made to secure results – a positive trend regarding the overall debt burden in the Belarusian economy has emerged. It is a ratio of the total debt of the enterprises to their annual earnings. As of 1 June 2021 the ratio dropped by 3.9 percentage points in comparison with the beginning of the year.

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