TELECOM DRAG: Lithuania's telecommunications market will grow at a slower pace this year compared with 2001, according to observers.. Analysts say that the country's monopoly fixed-line telephone operator Lietuvos Telekomas will show little revenue growth and that the mobile telecommunications market should grow by just 10 percent to 17 percent due to increased competition. A survey carried out by Infobalt, the Lithuanian association of IT, telecommunications and office equipment companies, showed that the telecommunications market's revenue totaled 2.88 billion litas ($721 million), compared with 2.27 billion litas in 2001. The market accounted for 4.5 percent of the country's GDP, the business newspaper Verslo Zinios reported on March 14. Kornelijus Celutka, a project manager at the investment banking firm Prime Investment, predicted that the market would grow by 16 percent to 17 percent in 2002. "The fastest growing markets, just like last year, will be mobile communication and telecommunication equipment sales sectors. Their growth will reach 25 and 20 percent respectively," he said. Vytautas Plunksnis, an analyst at the brokerage firm Jusu Tarpininkas, said Lietuvos Telekomas, which has a 36.6 percent market share, would post slower revenue growth, while the revenues of mobile operators would grow 15-25 percent - a lower rate than last year. The information technology and telecommunication markets grew by 28 percent last year, according to Infobalt. The increase was due to a 14 percent increase in mobile communications penetration rate - from 13 percent to 27 percent. (BNS)
POWER SURGE: The supervisory council of the power utility Eesti Energia endorsed March 14 the firm's financing plan, which combines a long-term bank loan with an international bond issue. The loan term will be 15 years and it will cover about half of Estonian energy's 5.4 billion kroon ($317.64 million) financing requirements, board member Sandor Liive said. Liive said the Nordic Investment Bank, the German bank KfW, the European Investment Bank and the European Bank for Reconstruction and Development were potential creditors. The commercial banks would have the role of arranging guarantees for EIB, he said. The term of the bond issue would be 5 to 10 years, Liive said. Eesti Energia will order a rating from Standard & Poor's and Moody's. (BNS)
BREWERY SHARES: The European Bank for Reconstruction and Development intends to acquire a new equity issue worth 6.53 million litas ($1.63 million) placed by the Lithuanian brewery Gubernija, brewery director Romualdas Dunauskas told BNS. Gubernija is the fourth largest brewery in Lithuania with a 10 percent market share. The brewery's shareholders decided earlier this month to place the new share issue. They also decided to raise the company's authorized capital from 4.786million litas to 21.78 million litas. As of November 2001, Takhir Khabajev, a Russian national, controlled 49.9 percent of Gubernija. The brewery, which is based in the northern Lithuanian town of Siauliai, posted a turnover of 48.3 million litas in 2001, a 76.3 increase over 2000. Gubernija sold 20.04 million liters of beer last year, a 93 percent increase over 2000. (BNS)
BUYOUT OK'D: The Lithuanian Privatization Commission on March 15 granted permission to German energy companies E.ON Energie and Ruhrgas to form a consortium to bid for a 34 percent stake in the state-owned natural gas utility Lietuvos Dujos. The government-approved list of potential investors in Lietuvos Dujos will be revised to include E.ON Energie and submitted to the Cabinet this week. Liutauras Radzevicius of the State Property Fund told BNS that Ruhrgas and E.ON Energie would hold 60 percent and 40 percent of the consortium, respectively. "Actually, nothing is changing. Only the potential buyer becomes stronger, as E.ON Energie is even larger than Ruhrgas is." April 2 is the deadline for investors to submit their final offers, including a share price and investment commitments. If all goes smoothly, the sale could be completed in May. Once the strategic stake is sold, a second tender is to be announced, probably in June, to sell another 34 percent of shares to a Russian natural gas supplier. The government, which currently owns 92.36 percent of Lietuvos Dujos, will retain a 24 percent stake. Lietuvos Dujos announced on March 15 an audited net profit of 13.03 million litas ($3.25 million) for 2001. The company posted a net loss of 114,250 litas in 2000.
LATTELEKOM: Latvia's Parliament last week rejected an opposition faction's plan to maintain the monopoly of the fixed-line telephone provider Lattelekom until 2013. The ruling coalition wants to end the monopoly to meet European Union and World Trade Organization requests to open its market. The Danish firm Tilts Communication, Lattelekom's main shareholder along with the Latvian government, is suing the government to force it to retain the monopoly. Opposition MPs argued that it would be better to keep the monopoly than to pay lawyers fees and compensation costs.