YEREVAN, July 6. /ARKA/. The Armenian government will subsidize those companies, which will go public and become a publicly-traded and owned entity. A decision to this effect was made at Thursday’s government session.
The Government’s objective is to create opportunities for companies to attract financing. And not only from banks, but also from the placement of shares and bonds. This, according to the executive body, will create new opportunities for businesses to attract finance, and thus boost the economy.
However, for a company to be able to dispose of funds of its shareholders, it will have to keep transparent financial records. Its owners and managers must not run the company alone.
To help develop the capital market, the government is preparing to subsidize the costs associated with going public, including the cost of listing the company, as well as the cost of issuing securities and their placement. The subsidy will be provided while issuing bonds in Armenian drams with maturity term of at least 36 months.
If the company issues bonds, floats them and list them in the stock exchange, it will receive a subsidy of 2% of the nominal amount of floatation, but not more than AMD 30mln.
When issuing shares, 80% of the costs (for audit and services related to the issuance, placement and listing) will be subsidized. At the same time, each company will be able to receive support only once.
For companies wishing to obtain an international credit rating, the government will pay 50% of the services of international rating organizations, but only during the first year. At that, if a company puts up securities at Armenian stock exchange, the maximum subsidy will increase up to 80%.
According to the preliminary estimation of the Ministry of Economy, the support project will enable companies to attract financing in a much larger volume. And without any restrictions caused by the cost of collateral. In the first three years, the amount of support is expected to be about 10.65 billion drams, resulting in new issues of shares and bonds worth 97.5 billion drams. -0-
