Summed up

  • 1999-01-14
$11 MILLION WILL PUT ERA BACK ON ITS FEET: ERA Pank, which closed its doors to bankruptcy last year, needs 150 million kroon ($11 million) to completely restore liquidity, according to Veli Kraavi, a bank trustee. Kraavi said this money includes the necessary equity capital and outside capital to meet the compulsory reserve requirement. ERA Bank will continue negotiations with a German partner, who has already visited Estonia, on expanding its stock capital.

INVASION OF THE MOBILE PHONES: One out of every 11 Lithuanians is likely to interrupt a conversation or storm out of a movie theater to answer his cellular phone, according to subscription figures from the country's leading cellular providers. Figures show that cell phone subscribers increased to 328,400 last year, with mobile phones used by one in 11 Lithuanians. In late 1997, there were only 157,000 users of mobile phones in Lithuania. In Latvia, the number of mobile phone users doubled in 1998 to 6.8 percent of the population. At the beginning of 1998, 3.2 percent of the Latvian population were mobile phone carriers. According to the data about mobile phone users in Central and Eastern Europe collected by the ABN AMRO bank, mobile phones were used by 10.5 percent of Estonians in 1998.

INVESTORS STILL WARY OF BALTIC SECURITIES: A review of asset allocations by major Central European investment funds shows most investors are shying away from the Baltic securities markets. The survey of 13 funds, published in the January issue of Central European, shows that only four funds have invested part of their assets in Estonia, and two in Latvia and Lithuania. Two funds had taken new positions in Estonia in October, however, as well as one in Latvia and Lithuania. ABN Amro's East European Equity Fund dropped its Estonian holdings by half a percentage point in October to 3 percent of its $140 million capital. Framlington East Europe fund also slimmed its Estonian holdings by 0.5 percentage points, to 2.5 percent of its $8.8 million capital.

SHIPPING COMPANY PRIVATIZATION HEATS UP: Seven foreign companies have submitted bids to participate in a privatization tender for LISCO, Lithuania's biggest shipping company. The companies can still invite other investors and form consortia. A program for LISCO privatization, which is being drafted, will be sent along with a list of investors to the cabinet for approval. LISCO's authorized capital amounts to 534.315 million litas ($133.58 million), with 79.96 percent of shares owned by the state. The state plans to offer a 54-percent stake in LISCO to a strategic investor.

U.S. COMPANY TO RELY ON OIL SHALE: The U.S. concern NRG Energy, a potential buyer of Estonia's two largest power stations, said it would continue using oil shale for electric energy production for at least another 15 to 20 years, said Hillar Lauri, director of NRG's representation in Estonia. Lauri denied reports published in the Eesti Ekspress weekly that NRG would use natural gas from Russia instead of oil shale once it gains control over the power stations. Lauri said a long-term local supply of fuel was a cornerstone of NRG's business plan. "It's absurd to think that NRG could plan to use Russian gas instead of oil shale in a few years' time," Lauri said. The second cornerstone of the business plan is orientation of the Narva-based power stations to the Estonian market, Lauri said. "NRG has no agreements with Russia," he added. The U.S. energy company has for three years been vying for a majority holding in the two power stations that produce most of Estonia's electricity.

A BREWERY BETWEEN FRIENDS: Representatives from Danish beer giant Carlsberg and Svyturys, Lithuania's second largest brewery, will meet in the coming weeks to discuss future investment. Carlsberg has shown interest in investing in the Lithuanian brewery in the past. "If we look for a direct investor, it will be a serious deal so as not to do any damage to our shareholders," said Algimantas Stanaitis, director general of the Svyturys Brewery. Nordic investors now own nearly 18 percent of Svyturys, with the remaining shares held by its present and former employees. Last year, Svyturys boosted its beer sales to about 3.3 million decaliters from 2.8 million decaliters in 1997.

DEBIT CARD HOLDERS DECREASE IN ESTONIA: The number of valid debit cards held by customers of Estonian banks stood at 658,600 at the end of 1998, down by 32,808 from the end of 1997. With 75.6 percent, Hansapank had the biggest market share in debit cards. The number of cards issued by Hansapank and Hoiupank, a bank which merged with Hansa in 1998, stood at 497,647. Uhispank's debit cards numbered 150,238 at the end of the year and debit cards of Optiva Bank totaled 10,757.