The Verkhovna Rada supported Pivdenmash and confirmed its intention to protect the company from bankruptcy

15 January 08:49

The Verkhovna Rada has approved as a basis the draft law No. 12271 “On Amendments to the Law ‘On Enforcement Proceedings’ on State Support and Economic Recovery of the Rocket and Space Industry under Martial Law.” This is reported on the parliament’s website, according to [Kommersant].

The explanatory note to the draft law states that the state-owned enterprise Makarov Southern Machine-Building Plant, despite the destruction caused by regular rocket attacks and the damage caused, uses all budget allocations and funds received exclusively to fulfill state defense contracts, but it is not allowed to pay off existing wage arrears from these revenues. And the only realistic way to seriously increase the quantity and improve the quality of domestic launch vehicles is to strengthen state support for programs aimed at increasing the main financial resource of the state enterprise.

The draft law proposes to temporarily suspend enforcement actions and measures of enforcement of decisions (including seizure of property and funds) for the state enterprise “Production Association Yuzhny Machine-Building Plant named after A.M. Makarov” for the period of martial law.

This is not the first time the Parliament has tried to help Pivdenmash

In July 2020, the Verkhovna Rada of Ukraine, for example, adopted in the second reading and as a whole a law on the repayment of wage arrears of the state enterprise Production Association Yuzhny Machine-Building Plant named after A.M. Makarov in the amount of UAH 300 million, and also postponed the company’s debts to the budget. In particular, UAH 210 million was earmarked for repayment of wage arrears and related payments, and UAH 90 million for repayment of the tax debt on the unified social tax.

But the crisis at Pivdenmash started much earlier. While in 2012 Pivdenmash was among the world’s top five launch vehicle manufacturers, between 2012 and 2019, due to a lack of orders, the company halved its production volumes, which led to layoffs and debt accumulation.

As reported by [Kommersant], the day before, the Verkhovna Rada also extended the moratorium on bankruptcy of state-owned mines. According to the authors of the draft law, lifting the moratorium would lead to bankruptcy and further liquidation of mines, which threatens the country’s energy security.

Василевич Сергій
Editor