Footwear producer Marko to buy state share in Krasny Oktyabr

The government is selling its share in open joint-stock company Krasny Oktyabr to limited liability company Marko. The purchase contract will be signed by July 15, Marko's Director General Nikolai Martynov told BelTA. In order to stabilise the financial and economic performance of OAO Krasny Oktyabr the head of state signed decree No 324 on June 13, which envisages selling the state share (83.64% or 6,024,867 shares) in Krasny Oktyabr. The state share has the nominal value of over Br180.7 million (Br30 per share). As part of the deal Krasny Oktyabr is supposed to retain its footwear manufacturing specialisation and to increase the industrial output by 30% up on 2007. If unable to comply with the contract terms, Marko will have to return the difference between the market value of the shares as of the purchase date and the nominal value to the state budget. Krasny Oktyabr is sold along with its liabilities to the state budget and loan liabilities to Belarusbank. As of May 1, 2008 Krasny Oktyabr had over Br2 billion in overdue value-added tax. Marko has to settle the debt by 2014. Marko plans to use Krasny Oktyabr to start manufacturing all-season comfortable footwear. Manufacturing cooperation ties between the two companies have been in place for a long time. Nikolai Martynov said, “The purchase contract legalises our relations, allows preserving experienced workers of Krasny Oktyabr and enables Marko to rack up footwear output by 300,000 pairs per annum”. Limited liability company Marko is a major Belarusian footwear manufacturer. In 2007 Marko and San Marko turned out 2.6 million pairs of footwear, 15% up on 2006. Around 50% of the footwear is exported to Russia. Marko was founded in 1991. Along with footwear the company manufacturers leather goods and haberdashery as well as shoe lasts for the home market. The company employs over 3,000 people.