Administrator calls Riga Sea Lines a lost cause

  • 2005-11-23
  • Staff and wire reports
RIGA - The bankruptcy administrator of Rigas Juras Linijas (Riga Sea Lines) said that saving the insolvent maritime passenger carrier would not be possible.
Janis Jurkans told reporters Nov. 21 that he saw no possibility to save the company since in September shareholders had decided not to increase capital. He said the company's liabilities exceeded assets by 3 million lats (4.2 million euros). Outstanding debt totaled some 7 million lats.

"I do not expect anybody to work out a well-grounded recovery plan," Jurkans said.

The ferry Baltic Kristina, owned by RJL, stopped plying between Riga and Stockholm on Oct. 15, 2005, staying in the Riga port.

The ferry was not allowed to leave Riga Port by Rigas Pasazieru Terminals (Riga Passenger Terminal) since the shipper had accrued so much debt.

Since Riga Sea Lines owes several companies, its ferry and other assets were arrested. The company was declared insolvent as of July 25, 2005.

Parex Bank has the largest claim, and its court statement that the company should repay a $7.7 million loan was the main reason why shareholders, including Riga Port, decided not to raise capital.

Also, the company's near monopoly position was dealt a blow earlier this year after the Transport Ministry invited Estonia's Tallink to begin regular service between Riga and Stockholm, as well as other routes.

Riga Sea Lines was founded in January 2002. Shareholders include Riga City Council (35.48 percent), Astramar (27.51 percent), Riga Port (19.72 percent), Ilmaco Limited (9.77 percent), Juris Sabasovs (4.39 percent) and Vjaceslavs Sprisevskis (3.12 percent).