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Tallink to drop anchor in Riga in March

  • 2005-12-21
  • Staff and wire reports
RIGA - Tallink will make its maiden voyage between Riga and Stockholm in March, with a second ferry to sail the route beginning in late April, Transport Minister Ainars Slesers announced last week. Tallink officials, meanwhile, said they would consider a bid for Finland's Silja Line if the latter went up for sale.

But neither event sparked enthusiasm on equity markets, as Tallink's stock fell 7 percent over the week ending Dec. 16.

Previously it was suggested that Tallink ferries could begin running between Riga and Stockholm as of Jan. 10, 2006, though many doubted the details could be hammered out that quickly.

"The uncertainty is gone 's there will definitely be ferries. I don't think that anything could change," Slesers told the Baltic News Service. He said he asked Tallink to offer jobs to the staff of the insolvent Rigas Juras Linijas (Riga Sea Lines) that used to service the Riga-Stockholm route.

Executives at Riga Free Port announced they would not reduce port fees for Tallink and insisted that the Estonian shipper guarantee passenger service on the Riga-Stockholm route for at least five years.

Tallink had originally requested that port infrastructure be improved and port fees reduced before it begins sailing to Riga.

At present, there is no regular passenger ferry service between the Latvian and Swedish capital. Riga Sea Lines used to operate the route but was recently declared bankrupt. Its ship will be sold to pay off debts in the near future.

Tallink CEO and owner Enn Pant told the Eesti Paevaleht daily that the shipper would bid for Silja Line when it goes on sale. "I don't know how they intend to arrange this auction, but we'll find out soon," he said. As he described it, Silja was attractive for several reasons: its fleet, trade mark and routes.

Acquisition of Silja Line, he explained, would provide access to the route with the biggest passenger numbers in the Baltic Sea: Helsinki-Turku-Stockholm. "We have made no decisions about the Helsinki-Stockholm line, but I'm not saying 'no.' Why not?" he said.

Pant said Tallink's equity ratio had slipped this year, as the group has too much cash on hand. He added, however, that the firm was not going to invest all of it in fleet renewal and expansion. "We can't say at present exactly where [the money will be invested], but we'll get out of this position soon," he promised.

On the markets, Tallink's stock has fallen as numerous small shareholders dump their stock after buying during last month's IPO, brokers said. At the same time, however, the Finnish pension fund Keskinainen Elakevaku-utusyhtio Ilmarinen, one of Tallink's largest shareholders, has been unloading its stock. Before trading with Tallink stock began a week ago, the Finnish pension fund owned almost 3.6 million shares, making it the sixth-largest shareholder. As of Dec. 16 Tallink's shareholder register no longer listed Ilmarinen among its major shareholders. Brokers observed that a major Scandinavian fund was selling large numbers of Tallink shares last week.