Holcim contests claim Furthermore, the company remains true to its current obligations. Holcim duly reports the investments made to the State of Azerbaijan every half-year, and the Government has taken note of the reports without any objection. Any interest to be paid for a loan must reflect the rates used in the region where the money is invested. Holcim has given the loan to Garadagh Cement on the basis of LIBOR + 3; currently 3.2 per cent. The current rates for loans in Azerbaijan are 18 per cent. Today, 5.2 per cent of the principal debt amount has been paid back to date.
Holcim and the minority shareholders cannot receive dividends based on the Azeri Law. Garadagh Cement apart from the loan extended by Holcim it still carries old debt it had to take over from the State of Azerbaijan during the privatisation. The Azeri Law forbids the company to pay any dividend to its shareholders until such debt has been reduced. Garadagh makes regular payments to its creditors to reduce its debt as fast as possible. Holcim as the owner of 88 per cent of Garadagh Cement has a primary interest in receiving dividend but as - the minority shareholders - is compelled by the Azeri Law to wait for a sufficient repayments of the debt of Garadagh Cement.
The acquisition price paid for Garadagh Cement was in line with the prices paid in Eastern Europe notes Holcim. Only through Holcim's investments and expertise the plant has reached the ability to produce quality cement and to fully use all its currently available production capacity. Garadag Cement has increased its production to 900,000t in 2002. For 2003 it expects a further small increase . enquiry.