Company briefs - 2009-02-25

  • 2009-02-25
Lithuania's state-owned railroad company, Lietuvos Gelezinkeliai (Lithuanian Railways), saw its freight traffic decline by 29.1 percent in January year-on-year to 3.405 million tons, the Statistics Department reported on Friday. It also said that month-on-month freight traffic declined by 16.7 percent. "The decline in revenues is even larger," Transport Minister Eligijus Masiulis told parliament. The drop in freight traffic was the most pronounced in the direction of Kalinigrad, he said, adding that a decline in freight volumes carried to Latvia and the port of Klaipeda was less significant. Masiulis attributed the decline to the economic downturn. "Similar declines in freight traffic are also observed in Belarus, Russia," Masiulis said. Lithuanian Railways left the rates of freight transportation unchanged, which strengthened its competitive positions since the rates in the neighboring countries increased by 5 to 15 percent, Masiulis added. Last year the company lost its former position as the top freight transporter in the Baltics to its Latvian rival Latvijas Dzelzcels. The Lithuanian operator's share in freight transportation was 40 percent in 2008. Latvijas Dzelzcels held 41 percent and Eesti Raudtee held 19 percent of the Baltic market last year.

The government has announced that the state-held shares in Parex Bank that the Latvian government took over at the end of last year to save the privately-owned bank from financial troubles will now be transferred to the Latvian Privatization Agency so that the agency could proceed with steps towards selling the bank. Currently the state-held shares in Parex Bank are held by the state-owned Latvijas Hipoteku un Zemes Banka (the Latvian Mortgage and Land Bank). "The government decided to transfer Parex Bank shares into possession of the Privatization Agency to ensure further professional actions in preparations for the share capital increase and subsequent sale of the bank," said Finance Ministry state secretary Martins Bicevskis. He said that the government's initial intention upon the takeover of the bank had been to sell it within 12 months. the government and former Parex majority shareholders signed an agreement on the takeover of 85% of Parex shares by the state. As a result, Parex has become a subsidiary of the 100 percent state-owned Latvian Mortgage and Land Bank. The European Bank for Reconstruction and Development (EBRD) continues to assess the option to join Parex banka stabilization process. EBRD has an extensive experience in restructuring banks and this organization's involvement in bank's reorganization process is globally considered as a positive sign. On March 24, an emergency Parex banka shareholders meeting will take place to decide on increasing bank's share capital.