Insolvent glassblower finds strategic investor

REZEKNE, Latvia (BNS) – Insolvent glassware producer Livanu Stikls hopes to improve its economic position with the help of a strategic investor from Germany, the enterprise's board chairman Imants Buss said Nov. 16.

"I hope that the company will keep working because we have found a strategic investor. Cooperation with Herner Glas has been going on for six months already, and it is one of the largest buyers of our products," Buss said.

Germany's Herner Glas buys from Livanu Stikls lamps, and the glassware company has organized special training for its staff to meet the requirements of the German customer.

Herner Glas buys from Livanu Stikls products worth between 120,000 and 150,000 Deutsche marks monthly.

After a court ruling declared the Latvian glassware maker insolvent Nov. 15, the firm's board chairman hopes that the company's administrator will work towards keeping Livanu Stikls in operation. As The Baltic Times was informed at the factory, production is still being put out.

A Latgale regional court satisfied the insolvency claim filed against Livanu Stikls by the Dati software company. Livanu Stikls, based in the eastern Latvian town of Livani, owes Dati some 19,000 lats ($31,000) under a software supply agreement signed between both companies two years ago. The glassware manufacturer's creditors will convene within three months to decide whether to rehabilitate the company or to institute bankruptcy proceedings.

By the end of this year, the concern will have over 600,000 lats in accounts payable while its monthly sales under existing supply agreements constitute some 50,000 lats.

The Latvian gas supplier Latvijas Gaze is also one of Livanu Stikls' creditors and has threatened to cut gas supply to the factory thus stopping the production unless the company pays its overdue bills by this week.

The glassware plant employs a staff of 290 people, who haven't been paid their salaries either and whose social taxes haven't been paid off in due time. The glassware company's president explained the purchase of a new glass-melting furnace had contributed to the company's financial decline, but without the new equipment production would have already stopped a year ago because other technologies used at the plant are outdated.

The crisis was also partly due to fluctuations in the euro and Deutsche mark exchange rates, which had an adverse effect on the value of part of Livanu Stikls' exports.