Company briefs - 2012-10-18

Although the results on the nuclear referendum were negative, some economic analysts do not see Japan’s Hitachi abandoning the nuclear project in a hasty fashion without further political considerations from the new government in office. According to Gitanas Nauseda, adviser to SEB Bank president, “Hitachi is a solid company. It will not go around in circles, it will wait for the decisions of our politicians, reports BNS. Nauseda believes that the country’s Baltic partners reaction will be fundamental at this juncture. On this point, the financial adviser recognized that “now the most important thing is what the partners will think about the referendum. If their approach is negative, it will be difficult to manage without those partners. People were overwhelmed with information from both sides, including the proponents of the facility, and its opponents, rather spontaneously. It was difficult for them to put two and two together and to look closely at the arguments put forward by both parties,” concluded Gitanas Nauseda.

On this front, one of the most instrumental figures in the future of a nuclear power plant is the CEO of Visagino Atomine Elektrine (VAE – Visaginas Nuclear Power Plant), Rimantas Vaitkus. From his perspective, final decisions will be taken by the incoming Seimas and the new Lithuanian administration. He also agrees that Japanese corporation and the strategic partner of the nuclear project, Hitachi will wait for the new political actors.

The CEO expressed to BNS that “we keep contact with Hitachi’s people and are waiting for final official results. It is a non-binding referendum and the final decisions will be made by the government and the Seimas. Both Hitachi and (our board) will wait for those decisions. Nobody can say what will it come to eventually and now we have to continue with what we have been doing so far,” concluded Vaitkus who also acknowledged the importance of the high turnout by voters during the elections.
 

Estonian Air issues guarantee for $60 million for purchase of Bombardier aircraft, Eesti Paevaleht writes.
In order to purchase three aircraft from the Canadian aircraft manufacturer, Bombardier, Estonian Air set up a company EA Jet Leasing Ltd, in order to finance the scheme, with the assistance of Export Development Canada (EDC). EDC controls the company, but Estonian Air are the owners according to the airline’s annual accounts. The airline has taken out a lease for the three aircraft from EA Jet Leasing Ltd for a period of twelve years. A guarantee to secure the liabilities of the leasing company was signed by Estonian Air for the benefit of EDC to the tune of $60 million.

Estonian Air not only has leasing liabilities, which, should the airline wish to give the aircraft to another company, be easy to transfer, it also has a potential liability for $60 million.
However, if the airline was to be liquidated by the State, then not only would the aircraft have to be returned to Bombardier, but EA Jet Leasing Ltd could exercise its right to claim against the $60 million worth of liabilities.