TALLINN - Nearly a third of the companies that have received up to 100,000 kroons (6,400 euros) in start-up aid from Tallinn's city government this year and last find themselves in tax arrears, with three companies already in bankruptcy proceedings, reports news agency LETA. The city has offered support to 69 companies under this program, 26 of which are now in tax arrears.
One of the debt-laden companies, Sport Court, which is busy selling their 'sport courts,' has the largest tax arrears, totaling 800,000 kroons. "That amount certainly doesn't mean bankruptcy for us, we'll keep operating. Currently very many enterprises are not doing well. We are at a standing point now," says Keio Kuhi, one of the owners.
Another company that has received start-up aid is Bestfood Group, which offers delicatessen services, including for the Estonian railway company Edelaraudtee. Bestfood is running a tax debt of 200,000 kroons. Rauno Oidekivi, one of its owners, is optimistic despite the economic difficulties. "Starting costs are large for a public catering company. The start-up aid gave [us] huge support, but covered only a small amount of total investments," said Oidekivi.
The company operated for about four months with a loss, before turning to positive cash flow this spring. Currently the company is working to cover its tax debt.
One of the three companies to have entered bankruptcy, Take Me Home, was managed by Tarvo Ong, who sold the company to Raul Reino, member of the Domus Kinnisvara management board last spring. "I sold it since I needed the money. Everything worked, but the company needed investments," Ong said.
Reino however is suing Ong for misinformation on his purchase. "He made the [company's] situation better, through his words and accounting. Things weren't as the seller showed them to be. The company had debts already then," says Reino. Reino says that he has been trying to save the company, but is doubtful over its chances.
