Lithuania to overhaul state run companies

VILNIUS - The Lithuanian government has announce that it will initiate a massive overhaul of state-run companies following the publication of the first annual report on the status of the businesses.

The restructuring comes as part of a bid to help improve the budget in the country.

"The portfolio of state-owned commercial assets has an estimated value of more than €5bn which is comparable to around 20 per cent of GDP. The portfolio represents substantial economic value for the nation especially within the energy, forest, real estate and transport sectors," the Lithuanian government said in a statement.

According to government statistics, 10% of state-run companies are currently on the verge of bankruptcy.

"The Government has ownership in more than 300 companies (including holding companies) that are considered of commercial nature, more than 30 companies are under bankruptcy, liquidation, restructuring or reorganisation," the statement said.

Prime Minister Andrius Kubilius said the reforms, which will be headed by the economy and finance ministries, will be aimed at improving efficiency.

"This is the start of structural reforms that will stimulate growth, increase competiveness and reduce the budget deficit," the prime minister said.

"The portfolio of commercial assets has a substantial potential for efficiency improvement and thereby an ability to contribute in a material way to the state budget. The first step in this process is setting the highest standard of transparency for State-Owned Enterprises," he said.