Ailing AS Kalev to restructure empire

  • 2009-02-25
  • Staff and wire reports
TALLINN - AS Kalev group, one of the largest companies in Estonia, has sold off its sports channel and announced that it will restructure its other companies in an effort to survive the economic crisis.
On Feb. 18, Kalev Meedia sold 100 percent of its shares to Videomeedia Pluss OU, a company run by Kalev Sport television Channel chief Producer Toomas Lepp.

On the same day, board member of Eesti Spordikanal Alar Pink was recalled from his post and Lepp and Ivar Jurtsenko were appointed as new board members.
Pink said that giving up its holding in Kalev Meedia would give the new owner the freedom to find investors for Eesti Spordikanal. He said investors were needed so the work of the television channels could continue.
Kalev's financial woes have made headlines in recent months, as large amounts of company debt have come to light.

Lepp told the Baltic News Service the orientation of the channel will not change and it will be run by Ivar Jurtshenko, who presently heads the sports desk of Kalev Meedia.
He said the program planning will be altered with the aim of turning Kalev Sport into a commercial channel governed by market principles.

Employees of the channel will stay on, Lepp said.
"We'll examine where costs can be saved and how the program composition can be made more attractive to advertisers and more palatable to viewers," he said.
According to the sales contract, Kalev Meedia has the right to repurchase Eesti Spordikanal within one year.
Eesti Spordikanal transmits the Kalev Sport and Neljas (Fourth) television programs.

There is no decision yet concerning further activity of Kalev's news portal, the Tartu radio station and of the newspaper Tartu Express, which remaine under Kalev's management.
Oliver Kruuda, the owner of the Estonian AS Kalev group, told reporters that the company was planning to cut expenses as much as possible and survive the difficult times.
Asked about his failed media business, Kruuda said that he did not regret entry into the sphere. He said that Kalev had invested in media for one and a half years and it was no longer possible to invest into the previous strategy of the company.

Kalev is also planning on restructuring the Kalev Real Estate Company into a holding company, REC Varad AS, and start selling a real estate portfolio worth about half a billion kroons (32 million euros). Kruuda said that two or three people would remain to administer the real estate. The money will be used for the payment of debts.

With the sale came the news that AS Kalev is going to give up its name in favor of the chocolate factory, a company in the Kalev group.
The Kalev group is planning to rename its subsidiary, Kalev Chocolate Factory, AS Kalev, thus restoring its old name. Kruuda did not wish to disclose the future name of the listed company Kalev, pointing out that if he did it someone could register it in his name.
Kruuda said that Kalev Meedia will be renamed Via Concept, and that Lepp was now trying to secure investors for the company.

Kruuda also said that being listed on the stock exchange was becoming a burden for the company.
"It doesn't bring any value added. We have not brought in any additional capital from the stock exchange," Kruuda said.