Greek investor fails to keep promise

TALLINN - The Greece-based Virginia Equities Group, which had promised to finance the building of a methanol plant for the chemical company Nitrofert based in Kohtla-Jarve in northern Estonia, did not fulfill its commitments by the deadline and Nitrofert has had to cancel a share issue for the investor.

Nitrofert's deputy director general Alexei Nikolayev said the firm issued 101,700 treasury stocks to the Greek company, which had to be canceled by a general meeting of shareholders as the firm could no longer keep them in its balance by law.

"Consequently, Nitrofert's circle of owners and stock capital remain the same, there have been no changes," Nikolayev said.

He said the plan to build a methanol plant has not been buried yet and the firm continues casting around for backers. "The Greek company, too, still keeps making us promises," he observed.

Under a contract signed a year ago, Virginia Equities Group, which is registered in Thessaloniki, Greece, was to acquire a majority stake in Nitrofert through expansion of stock capital.

Nitrofert's owners is the Kaliningrad, Russia-based Gaz-Oil, in which Russia's Gazprom has a stake, as do J.I.T. Press S.A. from Luxembourg and Batball, a company owned by Stanislav Smirnov.

The chemical company has a stock capital of 169.5 million kroons ($9.5 million).

At the end of October 2000, the national power and gas utilities Eesti Energia and Eesti Gaas took control of Nitrofert to recover debts amounting to tens of millions of kroons.

The creditors are not interested in the chemical company's bankruptcy as it is one of the largest energy consumers in the country, using up one-fourth of the natural gas sold here and 5 percent of electricity.