29.Oct .2020 12:30

We Admit the Debt, but Now the Sector Is Insolvent – Alaverdashvili

We Admit the Debt, but Now the Sector Is Insolvent – Alaverdashvili
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The Horeca sector has accumulated an average debt of 20-25 million GEL to distribution companies. Due to the uncollected tens of millions of GEL, the manufacturing and distribution companies were left with no working capital.
The Horeca sector recognizes its debt to distribution companies. Hotelier Shalva Alaverdashvili explains that the sector is insolvent today, but the hotel business does not shy away from this obligation.
" I admit - on average, we have 20 to 25 million of distributors' debts in the Horeca sector. Until we open, we can not pay the money. I have acknowledged that I owe them money. I have confirmed everything on rs.ge, but until the country open and tourism starts working, I can not pay the money. Our sector has been negatively impacted, but more so have been the distributors because we have received products from them. Distributors have paid VAT, but we are literally unable to pay.
We had a multi-year conscientious relationship. The distributors trusted us with the products to us for 1-2 months, we paid the funds, and we had no problems. When we start working, we agree to pay the debt," said Shalva Alaverdashvili.
The restaurants also accumulated quite solid debts to the distributors. The restaurateurs say that today's problem is a good reflection of the current situation that if one of the sectors is in trouble, it will be followed by a chain reaction of the collapse of the related sectors.
"Today, 70% of the facilities in the entire sector are closed. This also created a problem in relationships with the distributors. Products are often perishable. Therefore sold products could not be cashed due to other debts,"- said Shota Burjanadze, head of the Restaurant Association.
Whether the government will take into account the crisis in the distribution business is still unknown. It is unknown what the government will do in regards to the sector's request to prolong tax benefits for another 6 months.