Summed up

Jul 20, 2000

NEW JOBS: The French company The Axon's Group will manufacture cables in a chemical fibre factory's premises in Daugavpils, Latvia. Production will begin this year, employing at least 100 workers by the end of December. Next year The Axon's Group will hire at least 100 more workers. The Axon's Group will put equipment in the factory's administrative building, which it is going to buy soon.

MERGING THE SURFING: Finnish telecommunications firm Finnet International intends to acquire Lithuanian Internet service providers Baltneta and Informacijos Tiltas and merge them into one company while pumping $1 million into the new entity. The investment will be used for wireless Internet service development. Baltneta currently has around 250 wireless Internet service users, and its network covers Vilnius, Kaunas, Klaipeda and other Lithuanian towns. Informacijos Tiltas also focuses on providing Internet services.

NO INTEREST INCREASE: Bank of Latvia's board decided not to change refinancing, bank investment in BL and pawnshop credit interest rates at its regular meeting July 13, Edzus Vejins said. The last time the board defined new interest rates was March 17, decreasing them by half a percent. From March 17, the refinancing rate is 3.5 percent per annum. Pawnshop credit rate for 10 days is 5.5 percent per year, from 11 to 20 days - 6.5 percent per year, but starting from the 21st day - 7.5 percent per year.

MONEY STAYS HOME: The Estonian Finance Ministry suggested increasing the percentage of revenue from personal income tax given to local governments to 66 percent from the present 56 percent, effective next year. Ants Liiver, head of the budget policy department at the Finance Ministry, said on July 14 the revenue increase was expected to help local governments to cope better with the task of running municipal schools. The personal income tax, of which presently 44 percent goes to the central budget and 56 percent to local budgets, is the biggest separate revenue flow to local governments in Estonia.

HEAVY METAL: The Finnish cast iron products maker Componenta is planning to set up a production unit in Estonia, with the decision about the size and location of the plant to be made in the fall. "We're currently conducting a survey about establishing a plant in Estonia and we will make a decision on the matter during the next few months," Componenta Corporation managing director Heikki Lehtonen said July 14. The Estonian plant would process details cast in Finland and Sweden, Lehtonen said. Componenta Corporation, a company listed on the Helsinki stock exchange, exports 78 percent of its output. Componenta supplies cast iron components to such international heavy industry giants as ABB, Ahlstrom, DaimlerChrysler, Scania and Volvo.

PIPING AWAY THE PROFITS: Russian Prime Minister Mikhail Kasyanov on July 14 signed a government resolution on financing the Baltic Pipeline System project, Deputy Prime Minister Viktor Khristenko said. The project, intended to be completed before the end of 2001, will give Russia a new export route capable of shipping 12 million tons a year to a terminal in Primorsk on the Baltic Sea coast north of St. Petersburg. BPS might diminish the role of Estonian, Latvian and Lithuanian ports for Russian oil exports when implemented. BPS will cost an estimated $460 million. Capacity of the system will be boosted to 30 million tons a year in 2002-2003, Khristenko said.

LIGHTS OUT TIME: Lietuvos Energija said it can't provide credit to debtors any longer and must take extreme measures. The company, owed 73.8 million litas ($18.45 million) by its clients, announced it will turn off the lights to debtors according to promise. It plans to pull the plug on municipal and national institutions, including some ministerial organizations. Customer debt is 15 percent higher this year than last, when it amounted to 64.2 million litas.

CREDIT RATING: Rating agency Thomson Financial BankWatch presented a credit rating to the regional Lithuanian Ukio Bankas for the first time. Short-term local currency debt rating was LC-3, and senior debt rating BB-. The report by Thomson indicated Ukio Bankas as a small bank based in Kaunas, Lithuania, with assets assessed at $62.9 million. The report said the current senior management of the bank have restructured the bank to help it overcome problems associated with weak lending that it encountered several years ago. The report said Ukio Bankas' performance is now stronger than it was: last year it made 5.53 million litas ($1.4 million) net profit, and its average rate of return on total assets was 2.4 percent.

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