VILNIUS - Privatization authorities have approved a plan for the sale of debt-ridden Alytaus Tekstile, which foresees a starting price of 358,300 litas (104,000 euros), a deep discount to the company's market value. According to the plan, which was given the green light by the Privatization Commission on March 30, the state will sell its 69.56 percent stake in the textile mill at 0.01 litas per share on the Vilnius Stock Exchange, beginning May 2. This is considerably lower than Alytaus Tekstile's current market price of 0.11 litas per share.
The sale will close June 15, the State Property Fund said.
Audrius Rudys, director of the fund, said there were three possible buyers, though he refused to name them.
Estonia's Tolaram Invest-ments, which is part of the Singapore-based Tolaram Group, holds a 15.31 percent interest in Alytaus Tekstile, and Rudys told the Baltic News Service that the firm did not intend to sell its stake.
The Boras Wafveri Group, a Swedish conglomerate, said in November that it was interested in buying the company. (See article above.) Boras President Thomas Wildstrand was quoted as saying that the group would consider buying the ailing company if the offer were "very attractive."
Alytaus Tekstile is saddled with 42 million litas (12.1 million euros) in debts, and the plant has nearly ceased production since its accounts have been frozen and its electricity shut off.
"The company currently has around 300 people working, of whom 130 are in the sewing department," Chairwoman Neringa Pazusiene was quoted as saying March 20.
The company took out a 1.5 million euro loan from Snoras Bankas in early March to cover overdue wage arrears. The state backed the loan.
The government took back control of Alytaus Tekstile from the Tolaram Group three years ago due to the investor's failure to meet its privatization commitments.
Attempts to revive the company under the state's ownership failed, and eventually managers of the Alytus-based factory quit over differences with the Economy Ministry.
Managers had been hoping to procure a 30 million litas cash injection from the state, and then another 5 million from banks, but the government rejected the proposal. As Prime Minister Gediminas Kirkilas explained, the European Union would likely frown upon, if not condemn, propping up the company for the second time.
