It has just been reported that on 1 March 2010 Belarusian President Alyaksandr Lukashenka has signed a presidential Decree No. 109 transferring 52 percent of OJSC Luch shares to the Swiss watch brand Franck Muller.
The Swiss watch brand will buy 1,217,215,000 shares for an approximate price of 36.5 billion Belarusian roubles (almost €10 million.) The rest of the shares, valued at around €8.5 million and still held by the Belarusian government, will be taken in asset management for a term of 5 years.
It is also said that Franck Muller has a right to acquire 655,423,462 shares at their current nominal price of 19.6 billion of Belarusian roubles (less than €5 mln at a current exchange rate) till year 2020 and increase its share to 80 percent.
The list of financial preferences for the watch plant goes on forever. Till year 2020, the now Swiss-owned OJSC Luch will not pay income tax and will be able to import raw materials, equipment and spare parts free of custom duties.
Next year, Franck Muller will also receive 30 ha of land near village of Shchamyslitsa about 3 kilometers West from the Belarus capital Minsk.
In return, Franck Muller will have to keep the “OJSC Minsk Watch Plant” brand and “Luch” trade mark till year 2019, while employing at least 700 workers.
It is still not clear whether Franck Muller will be able to grab the high-value piece of land in Minsk after the production facilities will moved to Shchamyslitsa.
Well, I truly hope that after the Belarusian watch brand will be taken over by FM, I will get to write more about Luch watches.