LAW ON RESTRUCTURING OF SOME OF THE ENTERPRISES SHOWING LOSSES
IN THEIR BUSINESS OPERATIONS
(RESTRUCTURING LOSS-MAKERS LAW)
(SPECIAL RESTRUCTURING PROGRAM)
(Published in the
Official Gazette of the Republic of Macedonia No. 2/95-17)
This Law regulates the conditions and procedures of the organizational and financial restructuring of part of the enterprises which show losses in their operation (hereinafter: enterprise).
The enterprises stipulated under paragraph 1 of this article are designated by the Government of the Republic of Macedonia. The restructuring is enacted through a special restructuring program passed by the Government of the Republic of Macedonia and supported by the World Bank (IBRD).
For the purpose of efficient functioning under market conditions, the enterprise is obliged to draft a restructuring program in cooperation with the Agency of the Republic of Macedonia for the Transformation of Enterprises with Social Capital (hereinafter: the Agency).
The program on restructuring of enterprises is approved by the Government of the Republic of Macedonia.
Banks shall not collect arrears based on principals and interest rates from enterprises that have incurred prior to the enforcement of this Law, except for credits for which guarantees have been issued by the Government of Macedonia.
The state, public enterprises and other creditors shall not collect due debts until this Law enters force except for pension and disability insurance claims.
The Office of National Payments (ZPP - Payments Operations Service) shall not effect payments of receivables of enterprises incurred from principals and interests on bank loans and receivables from other creditors incurred prior to the enforcement of this Law.
The Office of National Payments shall discharge the enterprise giro-accounts from the obligations stipulated under paragraph 1 of this article.
In order to ease the disrupted processes of economic reproduction and improve the solvency of the enterprises in the country, the Government of the Republic of Macedonia shall mandate a compulsory multilateral compensation.
The compulsory multilateral compensation is carried out by the Office of National Payments.
As an exemption from the provisions under article 2 and article 5 paragraph 1 of the Law on the Regulation of the Relations Regarding Payment of Arrears to the International Financial Institutions (Official Gazette of the Republic of Macedonia No. 48/94), the obligations of the enterprises towards the International Financial Institutions due for payment in 1995, shall become obligations of the state.
The obligations which have been settled under paragraph 1 of this article shall be transformed into claims of the Republic of Macedonia due from the enterprises. Enterprises shall settle these obligations according to paragraph 1 of this article.
All claims of the state, public enterprises and banks, except for pension and disability insurance claims, shall be transformed into equities of the enterprise.
Other creditors may transform their claims into equities of the enterprise.
The transformation of a claim into equity is effected in face value.
Creditors stipulated under article 7 of this Law may place their claims for public sale prior to their transformation into equities.
The funds allocated by the Government of the Republic of Macedonia from the state budget to enterprises for restructuring, including funds for severance pay and salaries of employees whose employment is to terminate, shall be transformed into a state equity.
The enterprise shall issue restructuring shares for the equity of the creditors stipulated under article 7 of this Law.
Restructuring shares represent priority shares without voting privileges.
As an exemption of paragraph 1 of this article, the claims of bank and enterprise creditors, whose capital is over 70% in private ownership, shall be transformed into equity capital.
Restructuring shares may be sold by their holders except to enterprises with social capital.
When sold, priority restructuring shares are transformed into equity capital whose value is determined on the market.
When this Law is no longer in effect, a mandatory public sale is implemented of the unsold portion of restructuring shares excluding enterprises with social capital.
Claims of employees in enterprises based on unpaid salaries or unpaid portions of salaries, at a minimum of the average salaries paid in the economy of the state, shall be transformed into equity capital.
The deficient portion of funds for the implementation of the restructuring program are obtained from the budget of the Republic of Macedonia, funds and credits from International Financial Organizations, funds from the programs PHARE, ECHO and other foreign assistance, compensation funds established from other donors, from funds realized through sales of redundant production means and parts of enterprises as well as bank loans resulting from profitable deals (commercial loans).
The funds stipulated under paragraph 1 of this article are approved for single self-financed deals anticipated in the restructuring program.
The priority in obtaining funds stipulated under paragraph 1 of this article is given to enterprises which are more successful in reducing operating costs.
The Commission for the implementation of the special program designated by the Government of the Republic of Macedonia in compliance with the standards set forth by the Government of the Republic of Macedonia, shall decide on the use of the funds under this Law, except for loans extended by commercial banks.
The Government of the Republic of Macedonia designates the bank through which the funds under this Law shall be placed by way of a separate account.
The bank shall transfer funds to beneficiaries based on a decision passed by the Government of the Republic of Macedonia.
Enterprises shall cover all current expenditures including energy costs as well as dues pertinent to taxes, fees, customs duties and other expenses determined by law from their individual incomes.
The funds stipulated under article 13 of this Law can not be used for payments of unpaid salaries.
The deficiency in self-funding of self-financed deals is partially covered by bank loans (commercial loans).
During the procedure for approval of loans to enterprises by the banks, there shall be no limitation of the Denar placements which are in the function of implementing the restructuring program.
During the procedure of implementing the restructuring programs in the enterprises the planned investments shall not be initiated, while ongoing investments are to cease except for current or new self-financed direct investments determined by the restructuring programs of the enterprises.
Social enterprises without managing boards shall elect them.
The Government of the Republic of Macedonia appoints at least one member of the managing board in the joint stock companies and social enterprises during the implementation of the restructuring program.
Members of the managing board appointed by the Government of the Republic of Macedonia have voting rights proportionate to the participation of the social ownership within the total capital structure of the enterprise but no less than 51% of the total number of votes.
The provisions under articles 127 paragraph 1, 129 and 130 of the Labor Law shall not apply to workers whose employment shall terminate due to the implemented structural changes and to the realization of their rights.
Workers whose employment has terminated due to restructuring of the enterprise are entitled to payment of due salaries or other compensations as well as severance pay from the state budget.
Severance is paid in the form of a monthly salary for each two years of service and is not to exceed 12 average salaries. The basis for payment of severance pay represents the paid or computed salary of the worker for the last month prior to termination of employment but not exceeding the average salary per worker in the economy published for the month.
Severance pay and salaries stipulated under paragraph 1 of this article are effective for payment on the day of termination of employment.
The termination of employment of the Employees whose employment is terminated based on the decision of the enterprise shall be effective on the date The Government of the Republic of Macedonia approves the restructuring program.
Disabled employees whose employment terminates due to restructuring of the enterprise are entitled to compensation in cash in the course of 3 years and in the amount of 20% of the average salary per worker in the economy which is to be paid by the Pension and Disability Insurance Fund.
The Government of the Republic of Macedonia shall direct a portion of the foreign technical assistance aimed at training managerial personnel in enterprises in the field of marketing, finance, organization and production in compliance with the restructuring programs.
During the implementation of the restructuring programs, the Agency in collaboration with the enterprise prepare a program for privatization of the enterprise in full or its spin-offs.
Enterprises, which according to the Privatization Law have been exempt from privatization, may draft programs for the privatization of their spin-offs.
A liquidation procedure is initiated for enterprises which have increased current losses in spite of the undertaken measures for restructuring.
A liquidation procedure shall also be initiated in enterprises where the restructuring process has not begun within a period of 6 months from the date this Law enters force.
The Agency shall oversee the implementation of the restructuring programs in the enterprises and shall notify the Government of the Republic of Macedonia on a regular basis.
Enterprises are obliged, no later than 30 days from the approval of the program, to prepare work plans for the implementation of the restructuring programs in which the dynamics of the measures for realization contained in the programs are to be determined.
Should it be required, the Government of the Republic of Macedonia shall enact supplementary regulations for the enforcement of this Law.
This Law enters into force on the date of publication in the Official Gazette of the Republic of Macedonia and shall be in force until December 31, 1995.