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Estonians buy Rigas Aditajs

  • 2000-11-30
RIGA (BNS) - Estonia's knitwear garment maker Hipo has purchased a 78 percent stake or 949,493 shares in Rigas Aditajs textile company.

The new director of Rigas Aditajs, Heikki Boode, told BNS previouslythat the Latvian company had been producing garments to fill Hipo orders for three years.

Boode said Hipo acquired Rigas Aditajs because the Estonian company lacked staff for the production of knitwear garments. The Latvian company also was purchased because of its technological equipment.

Riga Aditajs' shares have a par value of 1 lat, but under the deal the price for shares to be purchased by the Estonian company was established at 0.08 lats per ordinary voting share.

The Latvian company's paid capital is 1.292 million lats ($2.063 million), which accounts for 100 percent of its registered capital.

Boode said Hipo plan-ned to invest funds into Riga Aditajs' development, adding that the Latvian company's trademark will not be changed. The company will continue producing both its own products and knitwear garments at the orders of Hipo.

Riga Aditajs has incurred very big losses, said Boode, who added he could not give an accurate figure yet. Moreover, the Latvian company also has large tax arrears.

The company's 10-month sales totaled 669,000 lats and the total production output exceeds 662,000 lats. Riga Aditajs has 268,000 lats in accounts receivable, including 179,000 lats of bad debts. The company incurs a loss of 25,000 lats monthly.

According to data from the State Revenue Service, Riga Aditajs had 1.07 million lats in tax arrears as of Nov. 1. Previously the company was owned by its employees while Estonia's Hipo belongs to four private individuals. Having acquired shares in Riga Aditajs, Hipo replaced the Latvian company's board, app-ointing Andres Andersson and Katrina Kiho as the new board members. The Estonian company was established in 1993 and its annual turnover is 2 million lats.

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