EBRD pulls Gutta's loan

  • 2000-01-27
  • The Baltic Times staff
RIGA - As expected, the European Bank for Reconstruction and Development last week officially withdrew a 12 million euro loan for the embattled juice manufacturer Gutta, a company that in a year has fallen from a thriving Baltic firm to a debt-ridden creditor's nightmare.

Signed in November 1998, the EBRD loan was to help the company expand production for the Russian and Ukrainian markets.

Then it began to feel the shock waves of the 1998 Russian financial crisis.

Late last year creditors, including Hansabanka, Latvijas Unibanka and Sweden-based packaging company Tetra Pak, forced the resignation of founder and majority shareholder Nikolai Lovstov, who had used the EBRD loan to lure millions of dollars in credit.

Gutta, which quickly grabbed a 20 percent share in the Baltic fruit juice market, never met the conditions laid out in the loan.

Gutta officials said they would not comment on the EBRD loan until the company's shareholders meeting Jan. 28.