RIGA - Latvian Radio may be facing bankruptcy with the general director announcing the company had accumulated over 700,000 lats (1 million euros) in debt and that he would resign.
Latvian Radio General Director Aigars Semevics broke the news of the debt and his own resignation, warning of the uncertain future of Latvian Radio.
The four radio stations run by Latvian Radio ceased operations for one hour on Feb. 2 in an attempt to highlighting their financial troubles.
The move was criticized by Prime Minister Ivars Godmanis, who also has a rock music show on Latvian radio SWH. Godmanis said that an agreement had been reached between the government and Latvian Radio interim head Dzintris Kolats.
"We agreed on the budget," said Godmanis.
Though no agreement has been signed, Kolats has reportedly agreed that debt payments will be postponed until early spring.
"There will be more moments of silence if no financing is found for the Latvian Radio," said Latvian Radio spokeswoman Ilze Vasermane.
She said that the radio waves might be silenced forever if nothing was done within two weeks.
"The company is almost insolvent," said Deputy Chairperson of the National Broadcasting Council Dace Buceniece.
Acting head Kolats has already dismissed 70 employees and cut payroll by 15 percent. The move, as well as the unstable situation, led to a protest on Jan. 30. Several dozen employees met at the parliament building with mouths taped shut for a silent protest in an effort to gain the attention of lawmakers.
Latvian Radio has been faced with several difficult decisions since the government cut funding by 25 percent in late 2008.
Some of the ideas on the table for saving Latvian Radio include cutting more staff 's including the station's famous choir 's and limiting broadcasts to the Riga area.
Though the company has four radio stations, Radio 1 and Radio 2 have over 30 percent of listeners 's Radio 3 and Radio 4, meanwhile, have only about 6 percent of listeners. Latvian Radio is discussing limiting Radio 3, a classical music station, and Radio 4, a Russian language station, to Riga audiences.
Latvian Radio is also considering taking out a loan to help repay debts. At a Feb. 3 Cabinet meeting, ministers agreed to consider this possibility. The government has already allowed Latvian Radio to spend over 500,000 euros more in the first quarter of 2009 than was allocated by the National Radio and Television Council.
Kolats told the press that 120,000 lats would be needed to repay debts in February. He also said that an agreement had been reached with creditors to postpone payments until April.
After April 1, however, the future of Latvian Radio is uncertain. Kolats said that even with reducing the broadcasting range of Radio 3 and Radio 4, as well as closing down Naba, the student station, the company would still be left with a deficit of about one million lats.
However, Kolats is optimistic and expects the government may cover the debt.
"I have got an impression that there will be a solution," Kolats said.