OFF THE WIRE

  • 2002-03-28
KRAJBANKA DEAL?:Germany's Norddeutsche Landesbank (Nord/LB) is still interested in acquiring a share in the Latvian bank Latvijas Krajbanka, but it wants at least 75 percent of the bank or none at all, according to Jurgen Machalett, president of Pirma Banka, which is owned by Nord/LB. To get the stake Pirma Banka would have to strike a deal with three of the bank's largest shareholders, including the Latvian government, which own about 30 percent each. He said no concrete negotiations are under way, but he added that both parties were interested. Latvijas Krajbanka is the fifth largest bank in Latvia. Pirma Banka ranked 13th among Latvian banks last year in terms of assets. (Baltic News Service)

ANCHORS AWAY: The fast ferries owned by the shipping companies Tallink, Lindaliin and Silja Line are scheduled to begin operations this week. The boats will be making five round trips a day from Tallinn to Helsinki. Beginning May 3, the ships will make seven daily round trips and from May 31 they will make 11. According to Tallink's preliminary schedule, the company's two Autoexpress boats will open the season on March 28. (BNS)

GAZPROM DISPLEASED: A top executive in the Russian gas company Gazprom expressed his company's dissatisfaction with the privatization of Lithuania's natural gas company Lietuvos Dujos in a recent letter to the Lithuanian Economy Ministry, the daily newspaper Lietuvos Rytas reported. Alexander Ryazanov, deputy chairman of Gazprom's executive board, said in the letter that Gazprom would not wait in line for shares in the company. The Lithuanian government is negotiating the sale of 34 percent of Lietuvos Dujos to a consortium made up of the German gas companies E.ON Energie and Ruhrgas. The government plans to offer another 34 percent of the company for sale after the current tender is complete. Economy Minister Petras Cesnas invited Gazprom to take part in that tender. Ryazanov also reportedly said that Gazprom did not plan to build a proposed natural gas pipeline to Western Europe via Lithuania. "As to natural gas transit to Western Europe, we can say that Gazprom does not see any possibilities for joint action with Lithuania in the near future," Cesna was quoted as writing in the letter. Lietuvos Dujos has said that it would lose 160 million litas ($40 million) in estimated transit revenue per year if Russia decided not to build the pipeline through Lithuania. (BNS)

NEW FUND: Estonia's Trigon Markets is launching a Central and Eastern European Fund in April that will provide the opportunity to invest in small- and medium-sized companies in the region. "The region will achieve higher than average economic growth on accession to the European Union," said Toomas Reisenbuk, a Trigon Markets analyst told the Estonian business newspaper Aripaev. "The rise in share prices will be based on the firms' increasing profits and is in correlation with the economic growth, which shows us that the region has a lot of potential for the investor." The fund will invest in shares of Polish, Czech, Hungarian, Estonian, Latvian, Lithuanian, Slovak and Slovenian companies. Reisenbuk said the main emphasis would be shares in small- and medium-sized firms in Poland, Hungary and the Czech Republic, which are undervalued. The main criterion for investment is the companies' market price, a large domestic market share and a lack of foreign owners, which places the firms in a Western firms' circle of interest and creates growth potential through possible takeovers. (Baltic Business News)

MALT DOUGH: The Finnish company Polttimo Companies will invest 97 million litas ($24.2 million) in the Lithuanian malt producer Litmalt. The investment will help boost Litmalt's production volumes to 50,000 tons per year and the company's production capacity will rise nearly fourfold. A new malt production facility should begin operations in 2004, Polttimo Companies reported. With the increased production capacity, the barley cultivation area in Lithuania will grow from 10,000 hectares to 30,000 hectares and employ up to 900 farmers. Currently the company buys barley from nearly 500 farmers and agricultural companies. Litmalt is Lithuania's lone malt producer. Litmalt posted a turnover of 18.4 million litas last year and a net profit of 590,600 litas. (BNS)

NEW FLIGHTS: The Latvian carrier airBaltic will launch three new routes this spring. The airline will begin operating three flights per week to Moscow beginning April 23. Three flights per week to Vienna will begin on April 3 and three flights weekly will start flying to Berlin on May 1. (BNS)

OIL DEAL NEARER: Lithuanian Economy Minister Petras Cesna said March 21 that Williams International, the U.S. company that operates the Lithuanian oil company Mazeikiu Nafta, and the Russian oil group Yukos have nearly resolved their differences in talks over a crude-for-shares deal and only technical matters remain to be worked out. "They have also reached an agreement on loan guarantees," Cesna said in a news conference. Since June 2001 Williams International and Yukos have been negotiating a deal that would give the Russian oil company a 26.85 percent stake in Mazeikiu Nafta in exchange for supplies of at least 4.8 million tons of crude annually over a 10-year period. Yukos would pay 300 million litas ($75 million) for the shares in Mazeikiu Nafta and lend another 300 million litas for the Lithuanian oil refinery's reconstruction. Yukos has agreed to provide a seven-year loan to finance the plant's modernization at a 10 percent annual interest rate. Last year, however, the then government of Liberal Prime Minister Eugenijus Gentvilas refused to issue a state guarantee to back a portion of the 300 million litas loan. The negotiations between Williams and YUKOS reached an impasse last December. Williams and Yukos reportedly failed to agree on oil supplies. Yukos refused to commit to covering losses resulting from a lack of supply. The companies resumed talks in January. A long-term supply agreement is key for Mazeikiu Nafta to secure financing from international banks for the reconstruction of the oil refinery. (BNS)