The chronicle of Eger Tobacco Factory
On the great ship
“1. It should continuously seek opportunities for the transformation of the company into an organization with foreign participation, respectively our participation in the company which is conducting the basic activity, with consideration to the following points: a) foreign capital involvement should upgrade the technological level, and improve the company's cashflow position, b) it should improve export opportunities, c) it should ensure a rise in the wages/salaries of employees. 2. The company should expand convertible exports of its tobacco products and establish an efficiently operating foreign trade organization. 3. The company should increase the proportion of licenced cigarettes and own-developed quality cigarettes within domestic sales of its tobacco products, and should establish an efficiently operating R & D department. 4. It should rationalize the workforce structure, and create the optimal staff number in order to ensure the most efficient employment of the workforce. 3. It should ensure the training and further education of persons suited to successfully manage the company operating on a real market basis.” The company management was thinking of a joint venture company in which there would be a Hungarian majority ownership stake. The foreign partner would be permitted a minimum 30%, and maximum 49% ownership stake, where the 30% threshold was connected to the minimum property stake required under law to benefit from the five year tax allowance given to foreign- owned companies, while the upper limit was related to the desire to be able to control foreign influence over the company. We visualized foreign participation in such a form where it wouldn't buy a part of the existing ownership - because in this way the purchase price would have gone straight into the state coffers - but it would provide a capital increase on top of the already existing property and equal to 49% of the then current asset value; half of this would be paid in to the company in cash to improve the cashflow position, the other half would come in
