Off the wire

REVAL IN RIGA: The Reval Hotel Latvija in Riga started accepting first visitors on May 16 after some major renovation, but the official opening of the hotel will be held only in the second half of June. The Norwegian real estate development and management company Linstow International - Reval Hotel Group's owner - has invested over $25 million in the renovation of the hotel. The renovation started last June and lasted 11 months. The hotel has 382 rooms, a modern 1,800-square-meter conference center and several halls designed to accommodate up to 900 persons, several bars, a restaurant, a fitness center, a casino, a nightclub and a car parking lot. Reval currently manages five different class- and price-level hotels in the Baltic capitals of Riga and Tallinn.

PUBLISHING AT A LOSS: The Latvian publishing house Preses Nams, which belongs to the oil company Ventspils Nafta, knocked up losses of 1.21 million lats ($1.95 million) last year on a net turnover of 12.91 million lats, according to the company's annual report. Compared with 1999, Preses Nams has managed to increase turnover by 44 percent, while losses in 1999 amounted to 1.03 million lats. Preses Nams' losses in 2000 were incurred by payments made for land rental and the privatization of land surrounding the Preses Nams building, currency exchange fluctuations in the euro zone and lower revenues due to the belated opening of its new color newspaper-printing machine. The company made some quality improvements in publishing and polygraphic last year to pursue its strategic goal of becoming the largest polygraphic concern in the Baltics. In 2001, Preses Nams is expected to operate at a loss of 383,000 lats, and the operational revenue target is set at 20 million lats, up 55 percent over 2000. Production costs are expected to soar to 18.2 million lats while investment for this year is planned at 2.93 million lats. Preses Nams publishes a number of Latvian major newspapers and also books.

VULNERABLE ECONOMIES: The U.N. Economic Commission for Europe warned that a slowdown in economic growth in North America and Western Europe is going to seriously inhibit economic growth in Eastern Europe, including the Baltic countries. The commission pointed out in its first European economic report that the region's economic growth may remain considerably below an earlier forecast of 4 percent. A drop in the growth rate in the EU and particularly Germany may hold back the growth rate in the Baltic countries and Eastern Europe by one or two percentage points, the commission said. It added that the Baltic countries and the most developed transition economies of Eastern Europe are very sensitive to changes in demand on large foreign markets and may receive a negative external shock if last year's propitious trends turn. The U.N. commission noted that in the short term, the economic development of countries in transition depends above all on Western Europe's demand for imports and the prices of raw materials, particularly oil, on the world market.

ONE HUGE LOAN: The Lithuanian power company Siauliu Energija will borrow some 51 million litas ($12.75 million) to modernize the heating network of the city of Siauliai. Banks, financial intermediaries and contractors will be able to benefit from the modernization process, which will take up to five years. The Siauliai municipality decided to modernize the heating network of this central Lithuanian town without leasing the assets of Siauliai Energija to foreign companies or establishing joint ventures with them, Lithuanian business newspaper Verslo Zinios reported on May 14. The municipality has carried out a preliminary inquiry about banks that would be able to finance the investment project and received positive results.

FINE BRITISH SOCKS: The British knitwear manufacturer Simon May intends to launch operations with the Lithuanian knitwear manufacturer Sparta, which has started producing the first batch of pajamas for children under an order from the British company. Zenonas Janavicius, managing director of Sparta, told the business newspaper Verslo Zinios on May 11 that a representative from Simon May was already monitoring the quality of Sparta's production. The British company will use both Lithuanian and foreign fabrics for the production of knitwear for children. The projected capacity is 500,000 units of pajamas per year. A year earlier, the Swedish sock manufacturers Topeco and the Danish company Egtved launched orders at Sparta, with the production mostly going to the Scandinavian market. This year, the production targets of Egtved and Topeco are 1.4 million and 3 million units, respectively. Another British company, the stockings producer Breconshire Hosiery, whose orders Sparta has been executing since 2000, is going to start producing stockings for children at Sparta as well. Last year, Sparta produced 1 million units of socks for British companies.

BUYERS LINE UP: Lithuanian Economy Minister Eugenijus Gentvilas discussed the planned privatization of the natural gas utility Lietuvos Dujos with representatives of the German energy companies Ruhrgas and E.On Energie on May 9. The minister informed the German companies that, by the end of this month, the Lithuanian government was to choose a privatization model and decide on the size of the equity stake in Lietuvos Dujos to be put up for sale. Two major ways of privatizing the gas company are currently being discussed in the Lithuanian Parliament. The first option is to sell a stake to a consortium formed by a strategic investor and a gas supplier, and the second is to announce separate tenders to sell blocks of shares to a strategic investor and a gas supplier. According to local accounting principles, Lietuvos Dujos made an audited net loss of 144,253 litas ($36,063) in 2000, versus a net loss of 13.5 million litas in the previous year.