120 employees fired from bankrupt factory KIM in Vitsebsk over 3 months

Since February 17 the factory is in bankruptcy state.

The Economic Court of Vitsebsk region handed out a verdict that OAO KIM bankruptcy proceedings are initiated. After this process its future is to be determined: judicial rehabilitation or liquidation, VItsebski vesti informs.

Over the period of 3 month an analysis of financial and economic activities of the debtor had been carried out. It confirmed that the enterprise is insolvent. It became the reason for initiating the bankruptcy proceedings.

As said by Paval Zajtsau, an interim manager, the debt of the company is more than Br200 billion, and it is constantly growing.

Viktar Aksyonau, the CEO of KIM, explained that from the moment when the enterprise entered the process of bankruptcy, creditors paused financing, they failed to offer a serious work load to their capacities, and they even had to stop the knitted goods shop altogether. The company’s scarcity of working capital is over Br95 billion.

Today the management of the factory, experts of the city employment centre and other services think over different variants of employment for workers. Over the last 3 months 120 employees left, and the number of workers continues to shrink. So far there are more than 630 employees.

The issue of liquidation of backdated payments remains a problem. Almost the only opportunity for finding resources for preferential payments is a sale of estate property. Two items have been put up for sale already: a shop and a café in Victory Square, at a price of almost Br11 billion. The money is to be spent on clearing wages debts and other social commitments.

The Economic Court appointed Paval Zajtsau a crisis manager. He is in charge of business affairs of the factory now. He is to make a register of creditors and debt obligations of the joint stock company, to take measures to ensure the safekeeping of the property, and to prepare two variants of plans for the future of the enterprise, its recovery or liquidation.

As of 2013, the factory had 904 employees. 9% of all employees belonged to administrative staff. The salary of the CEO, according to the State Control Committee, was from Br12 to 18.5 million. At the same time, average wages at the factory was about 2.99 million. The debt creditor indebtedness in 2013 was 13 times as large the debtor indebtedness. Backdated payments were usual at the factory, and workers often held short-term strikes because of that.