Air Lithuania: We're not bankrupt

  • 2002-08-01
  • Baltic News Service, VILNIUS
National air carrier Lietuvos Avialinijos, or LAL, denied reports that Lietuva, its subsidiary company, is facing bankruptcy proceedings.

"LAL and Lietuva have received no information that would indicate that Lietuva's creditors have petitioned the court to initiate bankruptcy proceedings," LAL said in a statement.

The statement came after President Valdas Adamkus asked state auditors to establish if there are any grounds to consider filing a bankruptcy petition against Lietuva. The president's advisers said Adamkus was concerned over plans to declare a profitable company bankrupt.

Lietuva reported a net profit of 2 million litas (580,000 euros) for the first half of this year after posting an audited loss of 4.59 million litas for the full year 2001.

There has been speculation that LAL's subsidiary might be facing bankruptcy since the spring, when Stephens Moore Vilnius, which audited Lietuva's financial statements for 2001, said that the company was unable to continue operations without financial injections from its shareholder, as its short-term liabilities exceed its short-term assets by almost three times.

LAL's privatization advisers and potential investors in the national air carrier are also of the opinion that Lietuva should be closed down.

It appears, however, that the State Property Fund, which manages 100 percent of shares in LAL, and the Transport Ministry, which holds a majority of seats on LAL's board, have another opinion on this issue.

The government is expected to announce a tender for the national air carrier's privatization this fall.