VILNIUS - Lithuania's struggling textile mill, Alytus Textile, said last week it would sell some of its manufacturing facilities to foreign investors and lease others as part of a scheme to raise much-needed cash. "That way we could raise working capital, which we are short of. We hope to obtain a solid amount of funds and will consider various options to spend it," CEO Albinas Jasiulevicius said.
The company intends to implement the project, which would provide for potential foreign investors to acquire a significant part of the company's manufacturing premises, he explained. Premises sold include those accommodating production, and Alytus Textile may eventually lease some of the premises back.
On Dec. 14 the shareholders of Alytus Tekstile would vote on the sale of fixed assets and subsequent hire purchase thereof.
The textile producer reported 6.5 million litas (1.88 mln euros) in preliminary losses for the first nine months of 2005, a decline of 28.6 percent from the year-earlier figure.
The company is holding no punches to remain a viable operation. Previously, Jasiulevicius said that an unnamed U.K. concern wanted to transfer the production of synthetic fur to Alytus. The company also signed a contract with an unnamed Italian producer for outsourcing some manufacturing jobs to Alytus, while Italy's Cogi recently announced the transfer of light aluminum structure and profile manufacturing to Alytus, though that project has yet to take off.
The company is reportedly holding talks with IKEA, the Swedish retail giant that accounts for the bulk of Lithuania's furniture industry sales.
In September, there were reports that Alytus Textile, the largest cotton textile producer in the Baltics, was slowly climbing out of financial dire straits that it ended up in after a failed privatization deal with Singapore's Tolaram Group.
The company, which had planned to lay off part of its workforce, has lately been unable to cope with increased orders, not only due to a lack of working capital, but also of workers as well. The plant currently employs about 1,700 people.
Marketing director Saulius Poskus said that monthly orders for printed fabrics amount to 500,000 's 600,000 meters this year, compared with 300,000 's 400,000 meters earlier. In previous years the company took a summer break beginning July 15, though this year it was forced to skip the hiatus due to a boost in its order portfolio.
The Economy Ministry holds 66.29 percent of the company, while Estonia's Tolaram Investments controls 22.16 percent.