Off the wire

  • 2001-03-22
GIANTS ATTACK: Holiday Inn, one of the world's largest hotel chains, is set to expand its business into the Baltics. Holiday Inn Vilnius is to open its doors in the Lithuanian capital in the second quarter of 2002, and similar hotels are planned for Riga and Tallinn in a few years. Valmeda, a subsidiary of the local investment company Invalda, signed a 20-year franchise agreement with Bass Hotels & Resorts, the owner of the Holiday Inn chain, in Vilnius on March 13. The construction of the hotel is estimated to cost around 30 million litas ($7.5 million). Set up in the United States in 1952, the Holiday Inn chain now includes about 1,500 hotels in 100 countries. Currently, there are 48 hotels in Vilnius. A total of 4.1 million foreigners visited Lithuania last year, including 1.2 million tourists.

BANKERS TO COOPERATE: The heads of the Estonian and Lithuanian central banks and the Estonian Banking Inspectorate have signed an agreement on cooperation between the two countries' banking supervisory authorities. The document, signed by Board Chairman of the Lithuanian Central Bank Reinoldijus Sarkinas, Bank of Estonia President Vahur Kraft and Estonian Banking Inspectorate chief Andres Trink, marks another step in the establishment of international cooperation ties by the Estonian banking supervision, a spokesperson for the central bank said. In an environment of deepening integration of the Baltic markets it is very important for all the Baltic states to increase the efficiency of cooperation in the field of financial supervision, the spokesperson said. Estonia's Hansapank is currently holding talks on the privatization of Lithuania's second largest bank, Lietuvos Taupomasis Bankas.

PARTNERS WANTED: The city of Tallinn is planning to cut the number of municipally owned business corporations from the present 30 to nine by the end of this year, Deputy Mayor Ivar Virkus said on March 15. "It is not the city's task to engage in business, this is the private sector's role," Virkus said. The municipal government owned 57 business corporations at the beginning of 2000. The city is now searching for partners to run the companies still in its ownership. The partners will be brought in through stock capital expansion, sale of the company or offering the company's property for rent. The city intends to retain a stake in utilities whose business has a broad social impact, such as the heating company AS Tallinna Soojus, the Tallinn water company Tallinna Vesi and the city's waste dump, Virkus said.

OLD AGENDA: A March 16 meeting with the Nordic states' stock exchange alliance Norex has not changed the Riga Stock Exchange's position concerning the choice of partners. "We will continue the process of integration into Norex, but at the same time we will be open to other offers, including from Helsinki," said Riga Stock Exchange President Guntars Kokorevics. Baltic stock exchanges signed a letter of intent with Norex in May 2000. It was expected that the Estonian, Latvian and Lithuanian stock exchanges would join Norex in the second half of this year. But Helsinki stock exchange owner, the HEX Group, in Feb. 2001 came out with an announcement claiming that it has offered to buy more than 50 percent of the Tallinn Stock Exchange, thus the Tallinn bourse is no longer interested in joining Norex.

NEW PORTAL: Eleven states located on the coasts of the Baltic Sea have launched a joint project on the Internet in order to promote cooperation between small- and medium-sized businesses, the Latvian Development Agency reported March 14. At the initiative of the Council of the Baltic Sea States a special information portal has been launched. Business people will be able to acquire information in the portal about requirements and norms for doing business with certain countries as well as investment opportunities in the Baltic Sea region.

SNEAKING IN: The Danish company DFDS Tor Line, currently conducting negotiations with the Lithuanian State Property Fund on the sale of a 76.36 percent stake in the Lithuanian Shipping Company, LISCO, has already invested in the latter about 1 million litas ($250,000). The Danish company acquired nearly 0.5 percent of shares in LISCO through the national stock exchange. "We believe in a successful end of these negotiations. We want to show the Lithuanian government that we do not fear LISCO's minority shareholders and we are determined to acquire LISCO. We do not plan to acquire other shares in LISCO till the end of the privatization," said Peder Gellert Pedersen, the regional business manager of DFDS Tor Line. The government expects to receive at least $51.2 million for the stake in LISCO and expects that investments will reach $92 million. The negotiations are planned to be completed by May 1.

SIMPLICITY: Lithuania lagged behind Latvia and Estonia in terms of per capita advertising expenditure in 2000, data provided by the market research company SIC Gallup Media showed. The per capita advertising spending in Lithuania, which has the largest population among the three Baltic countries, stood at $12.71. The respective figures for Latvia and Estonia were $20.22 and $27.66. According to the data, Lithuania's total advertising expenditure shrank to some 380 million litas ($95 million) in 2000, from 427 million litas in 1999, as experts said the market was badly hit by a ban on tobacco advertising.

INVESTMENT BOOM: Non-financial investments in Latvia totaled 886.7 million lats ($1.40 billion) in 2000, up by 23 percent from 1999, the Central Statistics Bureau reported March 19. Non-financial investments in the public sector reached 412.2 million lats or 46 percent of the total amount last year, a 7 percent increase year-on-year, while the private sector saw 474.5 million lats in investments or 54 percent of the total, up by 42 percent from 1999. Of all non-financial investments made in Latvia in 2000, 42 percent or 374 million lats were invested in technological machinery and equipment and 7 percent or 59.6 million lats were invested into purchase of vehicles. Latvia's capital Riga led among other Latvian towns by the amount of non-financial investments in 2000 Ð 68 percent of the total Ð followed by the port city of Ventspils (9 percent) in the west and the county of Ogre (2 percent) in central Latvia. Eastern Latvian counties received the least share of non-financial investments.