Off the wire

  • 2001-07-19
NEW TAX LAW: The new value-added-tax law Estonian lawmakers passed July 14 provides a provision whereby travelers are allowed to bring in goods worth 5,000 kroons ($273) tax-free. The original bill set the ceiling at 2,700 kroons. The bill, a thorough revision of the current value-added-tax law, was adopted 49-20. The law takes effect Jan. 1, 2002. The new law establishes an overall VAT rate of 18 percent, similar to the previous legislation, but contains a detailed list of goods that will be levied with 5 percent and no tax. Under the new law, the import of services will be taxed, which business people estimate could raise enterprises' costs by up to 20 percent.

PAREX BOND: Parex Bankas, the Lithuanian subsidiary of Latvia's Parex bank, launched the first bond issue by the Parex Group last week. Parex Bankas, Lithuania's eighth-largest bank, issued litas-denominated bonds worth 40 million litas ($10 million). The issue was handled by Suprema. Parex Bankas issued 400,000 registered discount bonds with a maturity of one year through private placement. The bonds carry a coupon of 7.5 percent and mature on July 12, 2002. The nominal value of one bond is 100 litas. "Parex Bankas has become more active in the Lithuanian securities market. Our long-term goal is to become a leading participant on the domestic market," said Janis Tukans, chairman of the bank's board. Latvia's Parex acquired the Lithuanian bank in 2000. The bank is seeking to become one of Lithuania's four largest banks within two years. Parex has branches in all major Lithuanian cities. The Parex Group also owns Parex Lizingas, a leasing company, and Baltic Polis, an insurance company, in Lithuania.

TUBE SUCCESS: The Lithuanian TV tube manufacturer Ekranas reported an unaudited net profit of 28.1 million litas ($7.03 million) in the first half of this year, a 1.2 percent rise over the same period in 2000, the company announced through the local stock exchange on July 16. Ekranas posted a net profit of more than 27.77 million litas for January-June 2000. The company's turnover reached 208 million litas in the first half of 2001, a decline of 5.9 percent over the same period last year. The TV tube producer, based in Panevezys, is projecting a profit of 60 million litas and a turnover of 500 million litas for the full year 2001, compared to a net profit of 50.6 million litas and a 439 million litas turnover posted for 2000. Ekranas' shares are quoted on the blue chip official list of the National Stock Exchange of Lithuania.

AIRLINE SALE: The Lithuanian State Property Fund announced a tender for an adviser on the privatization of the national air carrier Lietuvos Avialinijos in the British financial newspaper The Financial Times on July 16. Potential advisers have to submit their bids by Aug. 18. The adviser will have to assess Lietuvos Aviolinijos position in the international aviation market, analyze the company's economic and financial performance, propose possible sales strategies to the Lithuanian government, help organize a public tender as well as choose an investor. The former government planned to work out a privatization program for the company in the second half of this year so that the privatization process could be completed by April 2002. Lietuvos Avialinijos has a 56.5 percent share of the domestic air passenger market. The company serviced 294,800 passengers last year, a 21 percent increase over the respective period in 1999. The company's audited loss for 2000 was 24 million litas with 196.71 million litas in turnover. The Royal Dutch Airlines (KLM), the Scandinavian airlines SAS, Finland's Finnair and some other companies have shown interest in becoming the Lithuanian carrier's strategic investor.

MECHANICAL INSURER: Lietuvos Draudimas, Lithuania's leading insurance company, together with the information technologies company Penki Kontinentai introduced the first insurance vending machines in the Baltic states for obtaining motor third-party liability insurance. Two insurance vending machines produced by the company Wincor Nixdorf have been installed in a shopping center and an Internet cafe in Vilnius. The machines perform the functions of an information kiosk and cash dispenser. Insurance vending machines function on the basis of mobile communications technology GPRS and are fairly easy to operate - a user has to have elementary computer skills and a valid debit card, the company's representatives said. According to data provided by the insurance supervisory service, Lietuvos Draudimas had a 42 percent share on the Lithuanian non-life insurance market and an 85 percent share on the country's life insurance market. Last year, Lietuvos Draudimas wrote 214 million litas ($53.5 million) in insurance premiums.

MOBILE LOSS: Latvia's Tele2 mobile phone operator has reported losses of 1.28 million lats ($2 million) after taxes for 2000 on a net turnover of 22.28 million lats, according to the company's annual report. Compared to 1999, the company's losses have almost halved with its net turnover up 47.7 percent. In 1999 Tele2 reported losses of 2.41 million lats on a net turnover of 15.08 million lats. Tele2 assets stood at over 28.26 million lats on January 1, 2001, 13 percent more than a year before. Equities at the beginning of this year were a negative 10.22 million lats, with a share capital of 2.45 million lats and losses accrued in previous years of 11.39 million lats. Tele2 reported that the number of clients it served rose considerably in 2000, adding that this year may be its "blooming year." Last October Swedish Tele2 signed an agreement with the former company shareholders to buy Latvia's second mobile phone operator, Baltkom GSM (now Tele2), for $277 million including equities and debts. Latvia's first mobile phone operator, Latvijas Mobilais Telefons or LMT, reported profits of 25.67 million lats last year.