Armenian government adopts a decision to compensate a part of expenditure of "Armavia" Ltd.

• Thursday, October 4, 17:38

 At its today's session, the government of Armenia adopted a decision to compensate a part of expenditure of "Armavia" Ltd by means of cross cancellation of debts.

The draft decision was submitted by the head of Civil Aviation General Department, Artem Movsisyan.

He said that on 14 March 2003 the government of Armenia, "Siberian airlines" and "Armavia" signed a trilateral investment contract, according to which "Armavia" got a right to implement flights in several directions for 10 years. For that, Armavia obliged to pay $15 mln to the state budget of Armenia over 10 years, including $5 mln were paid in 2003, and the rest $10 mln the company had to pay over 10 years, $1 mln every year. As of 31 December 2011,
the debt of Armavia to the state budget was $1 mln  (385,7 mln drams). At the same time, according to the contract, Armavia had to transport veterans of the Great Patriotic War free of charge or at easy terms, and the state had to compensate these expenses.  In this context, the government had 355,6 mln drams debt to Armavia. The state offered the company to repay debts by means of cross cancellation of debts on the income tax, but Armavia was working with loss. For this reason, the government has adopted a decision to hold cross cancellation of debts and Armavia is obliged to pay only the difference - 30,1 mln drams to the state budget.