Singaporeans invest more in Lithuanian textile firm

VILNIUS (BNS) - The Singapore-based Tolaram Group has pledged to inject 12 million litas ($3 million) in Alytaus Tekstile this autumn, but market experts say it seems to be yet another empty promise by the new owners of the ailing southern Lithuanian textile producer, the press reported June28.

If the Singapore financial group carries out their intention to purchase Alytaus Tekstile's new 12-million-litas share issue in the autumn, it will be their first financial injection in the company they acquired two years ago, according to the business daily Verslo Zinios.

Tolaram Group had promised to channel 196 million litas into the Alytus-based company earlier this year. However, they slashed their investment plans by almost four times in May, while the intended injection in autumn is more than 16 times lower than the original figure. Under the sale agreement with the Lithuanian government, Tolaram is to invest 240 million litas in Alytaus Tekstile over five years.

Furthermore, Tolaram Group is seeking to reduce workforce at Alytaus Tekstile to less than 2,000 people, although it has promised to keep 3,500 jobs under the sale deal, according to the report.

Lithuanian government officials have strongly criticized Tolaram for their failure to fulfill investment promises, but so far the Singapore group has been fiercely defended by the Lithuanian state property fund, which does not agree that the deal was unsuccessful. The fund's director, Stasys Vaitkevicius, has said Tolaram Group suffered huge losses in the wake of the Asian crisis, which has limited their investment ability.