Respublika issues ultimatum over Elta

  • 2005-12-21
  • Staff and wire reports
VILNIUS - Elta, a news agency owned by the Respublika Group, has told the State Property Fund that the company might declare bankruptcy unless the state invests 3 million litas (870,000 euros).

CEO Leonas Minkevicius said that the agency forwarded a respective address to the fund, though he refused to divulge details.

The fund responded by saying that the agency's financial situation had to be considered by the board, which would then make proposals to shareholders. "This is an issue within the competence of the company's board in the first place," Raimondas Sedlevicius, the State Property Fund's director of property, told the Baltic News Service.

The state still holds 39.51 percent of the news agency, and by issuing its financial ultimatum, private shareholders may be testing the government's willingness to retain the asset.

Ziniu Partneriai, which is controlled by Vitas Tomkus, publisher of the daily Respublika, now holds 18.43 percent of the company, while Respublikos Investicija, a company controlled by the Respublika Group, owns 39.5 percent.

Sedlevicious said Elta's board has not yet held a meeting to consider the company's nine-month performance.

Elta executives have informed state property officials that the agency's cash flows have become unstable, and the company will become insolvent without additional investments.

Accrued losses at the news agency stood at 216,720 litas in early 2005. In the January-to-September period, losses exceeded 67,600 litas. Short-term liabilities reached 3.24 million litas, which exceeds annual sales figures, the agency said in its writ.

Payments to some suppliers had remained outstanding since 2003.

Elta, which owns a large building located in the heart of Vilnius, is claiming it doesn't expect significant revenues on leasing its premises, as the building has been leased until 2014 under long-term contracts. Meanwhile, rental fees were obtained in advance and have already been used up.

Ziniu Partneriai and Respublikos Investicija have got a green light from the Competition Council to acquire up to 100 percent and co-manage the news agency.

Elta posted sales of 2.4 million litas last year.