RIGA - Two Estonian railcar companies have bought Lokomo-tive, the Daugavpils-based railcar repair plant and one of the biggest enterprises in Latvia's second largest city.
Spacecom, a major cargo handler in Estonia, last week acquired a 36.36 percent holding in Lokomotive from Parangon, while Skinest Projekt, a railcar repairer and parts importer based in Estonia, acquired 100 percent of Remlok, which owns a 49 percent stake in the plant.
The sums of the deals were not disclosed.
The arrival of investors brings new hope to the beleaguered Lokomotive, which in the first quarter of this year reported a loss of 322,100 lats (485,000 euros) on net turnover of 2.5 million lats.
Lokomotive reported that its company council has already decided to relieve Tadeuss Grzibovskis from the council and appoint Andrejs Silovs to the post until the next shareholders meeting.
The investors also intend to change the name of the plant. Lokomotive board member Bernadeta Golovana told the Baltic News Service that the new name would be discussed at an extraordinary shareholder meeting on Aug. 4, though names proposed for the plant could become known after July 15.
Skinest Projekt Chairman Oleg Osinovski was quoted by Biznes & Baltija as saying that, having done business with the company for the past 10 years, the Estonian investors were very familiar with Lokomotive.
"Over the past few years Lokomotive has lost a significant market share both in the Baltics and in the East," he said. "By modernizing the plant we hope to regain its former positions. First of all that's Russian companies, whose cooperation we consider to have great potential."
The paper also wrote that an investment project was being prepared, and that the Estonian companies were expected to invest at least 3 million euros in plant modernization.
Last month Spacecom was supposed to begin shipments of oil to Estonian ports in cooperation with the Russian operator Balttransservice, whose owners include the Severstal industrial group and the Yaroslavl oil refinery. Though a contract was signed to commence deliveries on June 1, but the other party to the deal, Eesti Raudtee (Estonian Railways), refused at the last moment.
It would seem that the investors certainly have the resources. Spacecom holds assets worth $100 million, while Skinest Projekt posted sales of approximately 30 million euros last year.
Prior to the actual sale agreement, Daugavpils Mayor Rita Strode said last week that a deal would take place and that the investors had great plans for the plant.
"Finally the plant will be able to breathe," she said.
Lokomotive stocks are listed on the free list of the Riga Stock Exchange. The largest shareholders until now have been Remlok with 49 percent and Parangon with 36.36 percent.
Last year Lokomotive posted profits of 183,500 lats on a turnover of 11.3 million lats. It repaired 356 rail carriages, including 134 diesel engine carriages, 203 electric trains and 19 diesel train carriages in 2003.
Lokomotive is one of two railcar repair plants in Latvia and, employing some 2,500 people last year, is a backbone to the Daugavpils industry.
