Kreenholm's woes continue in court

  • 2007-12-05
  • From wire reports
TALLINN - A county court has arrested two bank accounts of the Kreenholm textile mill and forbidden the company from using proceeds from a property sale due to an unpaid water bill.
CEO of Narva Vesi (Narva Water), Alexey Voronov told the Baltic News Service that the Viru County Court supported the decision of an arbitration court, according to which Narva Vesi is entitled to demand from Kreenholm 20.5 million kroons (1.3 million euros).

The court arrested two bank accounts belonging to the textile mill, and in addition issued an order banning Kreenholm from its claims to income from a recent property sale that had been executed on Nov. 7.
The sales were carried out by Narva Gate, a company linked with Boras Wafveri, the main owner of Kreenholm, to whom Kreenholm sold its real estate for 350 million kroons.
A quarrel between the Narva city government and Kreenholm erupted earlier this year when Kreenholm refused to pay Narva Water a debt of 16 million kroons as a result of higher water rates.
Narva Water threatened to cut off Kreenholm from fresh water and stop accepting its waste.
The city established new water rates in August 2006, and the new price list entered into force in November 2006.

Kreenholm turned to the courts for assistance, but was unsuccessful.
Kreenholm has been struggling for several years, and last year's losses totaled some 73 million kroons. The company announced it would lay off 800 workers throughout the year.
In October it was reported that the company was searching for a strategic investor in Europe. A Kreenholm executive said that Boras Wafveri, the Swedish-based owner, was prepared to sell his entire stake.