Company briefs - 2010-10-28

The insurance company If will pay 2.44 million euros in compensation to its Baltic customers whose trucks were destroyed or damaged in a fire on the Lithuanian ferry Lisco Gloria last month, If communications manager Daiga Bluke, told the business portal Nozare.lv. The Lisco Gloria was sailing from Kiel in Germany to the Lithuania port of Klaipeda on the night of September 9 when it was rocked by an explosion on its upper deck. 28 people suffered injuries in the ensuing fire. The vessel was at a distance of around 26 nautical miles from the Port of Kiel. So far, If offices in the Baltic countries have received 73 insurance claims following the fire. Most claims, totaling 1.934 million euros, were received by the If branch in Lithuania. If Director, Andris Morozovs notes that the compensation amount is impressive, given that dozens of trucks and trailers were destroyed in the fire. For companies to resume their business as soon as possible, If has decided to pay part of the compensation without waiting for the results of the investigation into the fire. Bluke explains that this part would be transferred to the accounts of If customers, based on the nominal value of their vehicles destroyed in the accident.

Grid operator Elering will build a second power link between Estonia and Scandinavia with a 25 million euro loan from Nordic Investment Bank. According to Elering CEO Taavi Veskimagi, all preparations for the construction of Estlink 2 will be completed in six weeks. The contract with the Finnish system operator, Fingrid, will be signed and the winner of the construction tender will be announced in the near future. “A lot of work has been done, and next year we can begin construction,” Veskimagi said. Estlink 2 will comprise two 145 kilometer underwater cables, a 12 kilometer ground cable in Estonia, a 12 kilometer overhead line in Finland, and transformer stations in the towns of Pussi and Anttila. The payback period of the loan will be 15 years, Elering announced.

Two Nordic banks already active in the Latvian market, DnB Nord and Nordea are likely bidders for Latvia’s Citadele banka , according to the sales strategy for Citadele and Parex banka prepared by consulting company Nomura International. The document, which has been publicized by the Web site Pietiek.com, indicates that both potential investors will be offered the chance to acquire Citadele in Latvia and the Baltic States, while the bank’s remaining assets will be sold separately. A possible price for the deal is not mentioned in the document; however, it is clearly stated that the aim is to obtain a price that maximally covers the expenses incurred by the state in saving the failed Parex banka in the early stages of the economic crisis. The future perspectives of Citadele are rated positively, and it is planned that the bank will already operate with a profit next year. According to the strategy, there is also interest among several investors in acquiring the old Parex banka; including Morgan Stanley Consortium, Deutsche Bank, CRD Capital, and Varde Partner. The possible scenarios for the sale of Citadele foresee that a deal could take place as soon as 2011, but at the latest this could take place in 2014. Meanwhile, the sale of the so-called “bad” credit portfolio of Parex will happen in 6-24 months. The strategy was prepared by Nomura at the beginning of September, prior to the elections, while the decision on which scenarios to pursue is to be taken by the government. However, it is still unknown when this decision will be made.