Restructuring moves at leisurely pace

RIGA - Latvian entrepreneur Gunars Kirsons reveals in the magazine Otkritiy Gorod that by filing for insolvency, he hopes to save his Lido restaurant and entertainment empire. “I went the personal bankruptcy route deliberately so that they leave me alone five years,” Kirsons explained in the interview, reports Nozare.lv.

“According to the new law which takes effect November 1, all property must be sold in six months and all bills, debts must be taken care of. But I filed while the old law was in effect. Five years is all I need to determine my errors, do some restructuring, and open new companies,” Kirsons reveals.
The founder of the popular chain of theme restaurants believes that equally to blame for the mistakes in his business are “the government and the bank.”

Kirsons notes that it has been reported that he owes 25 million lats (35.7 millio euros), and that the value of the Krasta Street Lido complex alone is 30 million lats. Still, he does not want to sell his company.
In November information from the Latvian Guarantee Agency (LGA) and banks lending to Lido Group seemed to indicate that there is a lack of interest from CEO Kirsons to carry out the necessary restructuring of his company, noted Economy Minister Artis Kampars (Unity) in an interview with the daily Diena.

The minister indicated that he had spoken to Kirsons several times a year ago, and that “we have already given him serious assistance. However, the reality is such that if a businessman does not really want to help himself, then all the help from the sidelines does not always turn out to be effective.”
Kampars revealed that Kirsons had received substantial assistance from the state, and that “the guarantee sums issued are very large.” The LGA previously reported that Lido was issued a guarantee of 806,819 lats for a working capital loan, and a 1,679,139 lats investment guarantee was also given to design and construction company Dizaina projekti, formerly known as Lido dizaina rupnica.

Kirsons filed for personal insolvency, as several of Lido’s lenders were not satisfied with the court-approved measures for the company’s legal protection process, and decided to turn to its owner as a private individual.
On Sept. 28, Riga’s Vidzeme District Court satisfied the request from Kirsons to apply out-of-court legal protection to his operations.

Lido’s main creditor is DnB Nord Bank, according to the company’s 2009 annual report. The company operated with revenue of 18.2 million lats and losses of 603,342 lats last year. In 2008, turnover reached 25.4 million lats, with losses at 1.7 million lats. In 2007 turnover was 24.2 million lats, but losses stood at 0.9 million lats.