YEREVAN (Reuters)–Armenia has agreed to review the terms of a deal selling its Yerevan brandy plant to France’s Pernod Ricard and to delay the final payment for shares for six months–its finance minister said on Monday.
"We have agreed to postpone this payment for six months–until June 30–1999," Finance and Economy Minister Edward Sandoyan told Reuters.
Pernod Ricard won an international tender in June for 100 percent of shares in the factory–an Armenian cultural icon whose brandies were coveted by Soviet leaders from Josef Stalin to Leonid Brezhnev and by British leader Winston Churchill.
The company paid $2 million immediately after signing the deal and had been due to pay another $28 million by December 10.
But the company asked for a delay in the payment because of difficulties caused by a severe financial crisis in Russia–the main market for Armenian brandy.
Sandoyan said the expected annual profit of the plant had been revised to $3.5 million from $5 million.
The sale of the debt-ridden plant is part of a wider privatization program of state-owned enterprises in Armenia as demanded by the International Monetary Fund as a condition for further support.
The factory produces more than a dozen different types of brandy–and has stock on hand which is more than a century old–but production slipped to just 15 percent of capacity in 1996.
It has always called its products "cognacs" despite protests from French purists who say real cognac is made only in France.