Summed up

  • 1999-03-11
INCOMPETENCE LED TO MAAPANK'S BANKRUPTCY: The parliamentary commission investigating Maapank's bankruptcy came to the conclusion that the bank failed because it did not find its niche in the Estonian banking sector. Maapank was declared bankrupt Aug. 24, 1998. The parliamentary group also concluded that the bank's work was complicated due to constant replacement of board members. The commission found that Maapank executives concealed essential information about the bank's operation from council members. The bank did not comply with the central banks' directives and submitted unrealistic future scenarios to the supervisory body. Maapank crashed because of incompetent management that took excessive risks on the securities market.

KALININGRAD WANTS TO ASSEMBLE VOLVO TRUCKS: Kaliningrad Governor Leonid Gorbenko proposed to launch a Volvo truck assembly line in the Russian enclave at the opening of the first Volvo Truck Corporation's servicing center in the region. The governor hailed the cooperation between Kaliningrad and Sweden as a favorable factor in the development of a special economic zone set up in the enclave in 1996. He promised to do his best to promote the cooperation. Anders Riding, Volvo's vice-president for eastern Europe, said the region's geopolitical situation and its closeness to Sweden were the key reasons for opening the servicing center here. "The Russian region is very important to Sweden," he said. Volvo sells around 7,000 trucks in Russia daily.

UNIBANKA, SAULES BANKA NOT TO MERGE YET: Latvia's Unibanka and Saules Banka could continue to operate as two separate banks. Saules Banka's President Natalja Klendere admitted that the two banks could distribute the business areas between themselves and operate separately in future. At present Saules Banka and Latvijas Unibanka have a common shareholder, Uhispank of Estonia. Klendere said that the possible merger between the two Latvian banks had not been discussed yet. "There are at least two or three options to how the situation might develop further. I think that one of the likely options is to keep both banks but then the functions of the market should be distributed between them," she said. Klendere predicted that any serious changes in the current situation could be expected no earlier than the end of the year.

FINNS TRY AGAIN TO BUY NARVA POWER GRID: Finland's Imatran Voima, which acquired Estonia's Laane County Power Grid, might participate in the privatization of Narva Power Grid. The Estonian Privatization Agency will soon decide on the privatization of 51 percent of shares in Narva Power Grid. Last year, Startekor Investeeringute bought a 49 percent stake in the company for 58 million kroons ($4.03 million). Are Veski, managing director for Imatran Voima, said the company's bid would depend on the terms of the shares' sale to Startekor. The Finnish company will announce its possible bid for Narva Power Grid shares after the deadline for the bids, Veski added. The Finns took part in the previous privatization tender for 49 percent of shares in Narva Power Grid, but the privatization agency chose to sell shares to Startekor.

VENTSPILS TO CHANGE ITS OIL RELOADING TARIFFS: Ventspils Nafta might soon revise its oil reloading tariff policy, perhaps indexing it to the world price of oil. Janis Blazevics, Ventspils Nafta's deputy council chairman, said the company plans to revise the tariff policy to make it flexible and more attractive for Russian oil exporters. Blazevics noted Ventspils Nafta is currently considering two variants of a new tariff policy. It might index its tariffs to the world oil prices or to the production cost of oil. A Moscow oil analyst said Ventspils mentioned the possibility of indexing the reloading tariff to the world price of oil at a meeting with Russian oil exporters in Moscow last week. "The reaction was quite favorable," said the analyst. "The Russians don't want to have to argue about tariffs every few months." Currently Ventspils Nafta has determined reloading tariffs at $5.00 per ton of oil and $5.50 per ton of oil products.

EBRD TO ACQUIRE A STAKE IN LITHUANIAN BANK: The European Bank for Reconstruction and Development could become a shareholder in Lithuania's Zemes Ukio Bankas by late July, according to a timetable offered to the country's Finance Ministry. The final date will be set during negotiations said Finance Minister Algirdas Semeta. The EBRD plans to convert a 15 million deutschemark subordinated loan into Zemes Ukio Bankas' shares and to swap its stake in the Lithuanian Development Bank for more Zemes Ukio Bankas' shares. Semeta told EBRD representatives the government backed in principle both the conversion and the share swap. The Finance Ministry has sent a plan for Zemes Ukio Bankas' further business strategy to EBRD and is waiting for its proposals.