Summed up

  • 1998-10-15
FOREKSPANK'S RATING SLIDES DOWN: Moody's rating agency lowered Forekspank's financial strength rating from D to E Oct.9. The bank's long-term foreign currency deposit rating of Ba2 will still be reviewed, Moody's Investors Service reported. The lowering of the rating reflects the deterioration of Forekspank's financial conditions to the extent that support from the Bank of Estonia became necessary. Moody's stated that Forekspank's financial strength rating was lowered to E because the bank required ongoing financial assistance, and its franchise value has been severely damaged. The bank's Ba2 deposit rating might be raised if the authorities guarantee assistance to the bank and set up a transparent mechanism showing how that will be achieved, Moody's said.

DISTILLERY SHARES AVAILABLE ON RSE: The shares of the largest Latvian alcoholic beverages producer, Latvijas Balzams, will be traded on the Riga Stock Exchange (RSE) beginning Oct. 15. Ilze Nagla, director of the public relations department at the RSE, said Latvijas Balzams' shares were included on the second RSE list. The Latvian Central Depository has registered 5.7 million of the company's shares. Latvijas Balzams belongs to the Ave Lat Grupa food concern. Last year the distillery earned 2.3 million lats ($3.9 million) on a turnover of 31.6 million lats. Its share capital is 5.7 million lats.

BEER SALES GO DOWN IN LITHUANIA: As Lithuanian beer gardens were taken down in September, beer consumption decreased by 8.1 percent compared to August. The 10 largest Lithuanian breweries still sold 1,269 deciliters of beer, which is 8.6 percent higher than last September. Lithuanians preferred beer from the Panevezys-based Kalnapilis brewery, which sold 345,000 deciliters of beer and took control over 27.1 percent of the domestic market. The Klaipeda-based Svyturys brewery sold 278,000 deciliters of beer and the Utenos Alus brewery sold 185,000 deciliters. They control 21.9 and 14.6 percent of the domestic beer market respectively. Over the nine months of this year, beer sales in Lithuania amounted to nearly 11.5 million deciliters, which is a 10.2 percent increase over last year.

RIGA SHIPYARD'S FIRST BABY: The Riga Shipyard company will in two or three weeks complete the construction of the hull of the first ship built in Latvia after the restoration of independence in 1991. Arturs Mucenieks, Riga Shipyard's spokesman, said the company hoped to finish work at the end of September, meeting the schedule and the demands of the Norwegian customer. Riga Shipyard built the hull of the fishing ship, while the remaining assembly work will be done by foreign companies. Riga Shipyard has signed three contracts on the construction of ships this year and protocols of intent on the construction of two more ships. The company will earn no profit on the first contract as it invested into equipment required to build the ship.

RUSSIAN ORE ENSURES ESTONIAN COMPANY'S WORK: The Estonian metal processing company Silmet signed a contract with the Russian Solikamsk magnesium plant for the supply of rare-earth metals ore. The ore will be processed at Silmet's shop which resumed operation in September. "The rare-earth metals shop, which was closed for two months in summer, was again put into operation in September, but there were still problems concerning both raw-material supply and sale of the product," said Neeme Jogi, Silmet's board chairman. Jogi said the contract would ensure that the sale contracts signed earlier are met, and jobs are guaranteed to 300 people. Jogi said that the product, a mixture or rare-earth metals and chlorides, will be supplied under contracts to clients in Japan, Austria, Great Britain and the United States.

BUTINGE OIL TERMINAL CAUSES NEW CONTROVERSY: The general construction contractor for the Butinge oil terminal, Preussag Wasser & Rohrtechnik, has vowed it will sell its holdings in Butinges Nafta and is advising not to invest in Lithuania, the Kiel daily Kieler Nachrichten reported. Preussag owns a 21.43 percent stake in Butinges Nafta worth 40 million litas ($10 million). Lithuania rejected some of Preussag's services as being excessively slow and requiring supplementary funding. According to the German paper, the concern is examining whether the Lithuanian administration can be sued and is planning to turn to the arbitration court in London. Jonas Kazlauskas, director of the energy development department at the Economics Ministry, said Lithuania should not be defeated in the arbitration court since Preussag demanded more money than was provided for in the contract and did not complete work on time. Lithuania expects new complaints from Preussag as the company is unlikely to sell its shares for what they are worth.