Akropolis suffers setbacks

  • 2005-12-14
  • Staff and wire reports
VILNIUS - Vilniaus Akropolis, the Baltics' largest shopping mall operator, suffered several setbacks last week as it withdrew its IPO prospectus and failed to open the doors of its new mall in Klaipeda on time.

Also, a company official was reported as saying that plans to build a mega-mall in the Latvian capital would be postponed indefinitely.

The company applied to the Securities Commission for registration of the prospectus in early November. The company later tried to amend the document but subsequently withdrew it.

Aurelija Gasiuniene, head of the commission's securities registration division, confirmed that the company withdrew its prospectus. Vilniaus Akropolis had been planning to go public next spring.

The company's chairman, Mindaugas Marcinkevicius, said that it was not clear as yet what the company would do in the future. "We have no agreement with the shareholders yet," he was quoted as saying.

The company has borrowed heavily to finance its ambitious expansion plans, while sales have been lackluster. Pretax profit fell 22.3 percent to 3.1 million litas last year as revenue sank 4.6 percent to 37.3 million litas.

The prospectus was prepared by Lohmus, Haavel & Viisemann, but Vilniaus Akropolis cancelled its contract after reports that two of the firm's brokers were accused by the U.S. Securities and Exchange Commission for insider trading violations.

Vilniaus Akropolis officials later confirmed that Carnegie, a Nordic investment bank, would remain its main advisor on the planned share offering.

The company's plans to build a mall in Riga, the Leta agency reported, have been postponed "due to a lack of infrastructure." The company had been hoping that Riga city officials would build the necessary roads around the mall, but the investment did not materialize.

Meanwhile, the Akropolis in Klaipeda failed to open its doors on Dec. 9 due to technical problems. Donatas Vilimas, the mall's marketing director, refused to give details of the problems.

Marcinkevicius, for his part, said that the company was working to solve the problems and open the center as soon as possible. The company has invested some 275 million litas (79.7 million litas) in Klaipeda's Akropolis, which contains 160 stores, six movie theaters, a sports club and a casino.

Around 8 million people are expected to visit the complex yearly.

Currently, the only operating Akropolis is in Vilnius. A similar mall should open next year in Kaunas, with planned investments amounting to 250 million litas.