Only eligible bidder sweeps alcohol auctions

  • 2003-06-21
  • Steven Paulikas

A purchaser for two of Lithuania's state-held alcoholic beverage companies has been selected, paving the way for the full privatization of the industry.
On June 6, the public tender commission announced that it had chosen the winning bidder for a 73 percent stake in Anyksciu vynas (Anyksciai Wine) and an 82 percent share of Vilniaus degtine (Vilnius Vodka) stock.
While the commission refused to officially announce the company it had selected, it is widely believed that the Lithuanian alcohol wholesale company Artrio-2 will buy the stakes.
Artrio-2 was the only bidder that satisfied the commission's requirements for the sale of Anyksciu Wine and one of six that advanced to the final stages of the Vilnius Vodka deal.
"Among the companies that participated, Artrio-2 was the only one that submitted all of the material in a timely fashion," said Antanas Malikenas, privatization director at the State Property Fund, the agency responsible for the sell-off of state-owned enterprises.
"They proved to be trustworthy," he added.
Artrio-2 beat out three other competitors in the initial stages of bidding for Anyksciai Wine and emerged as the leader in a field of no less than 13 other companies that submitted preliminary paper work for Vilnius Vodka.
In spite of Malikenas' enthusiasm, both sides have been cautious about releasing details of the deal before Artrio-2 is announced as the official strategic partner for the two alcohol producers.
"We cannot comment on our business plan or on the privatization process," said Alvydas Sekavicius, general director of Artrio-2.
Artrio-2 was established in 1993 in Vilnius as a subsidiary of the Artrio company, which also owns two other daughter companies involved in the wholesaling of food and beverages as well as hotel operation.
While both sides are currently involved in negotiations before a final contract can be signed, accompanied by a formal announcement of Artrio-2's success in the process, reports have been leaked that the State Property Fund stands to collect a handsome sum.
Unofficial sources have told the media that Artrio-2 is willing to pay 20 million litas (5.8 million euros) for its stake in Anyksciai Wine, double the government's asking price.
Even greater is the discrepancy in the wholesaler's reported 24 million litas offer for Vilnius Vodka, almost five times greater than the initial government valuation of the company, which demonstrates how lucrative the local liquor market is despite its lack of transparency.
In spite of the relatively large amount of money the state will most likely collect as a result of the tender offer, the government is remaining cautious about the outcome of the process.
"So far, there are no results to speak of," said Malikenas.
Nonetheless, if the deal did meet final approval, it would put an end to a string of conspicuously failed privatization efforts.
Last month privatization officials had to cancel the sell-off of Lithuanian Airlines after the only qualified buyer - SAS - announced it would not proceed in the process, forcing the state to retreat to the auction block.
The results for the offer of the two remaining state-owned distilleries, Stumbras and Alita, should be announced later this month.
Artrio-2 took part in neither of the offers for Stumbras or Alita. However, it is a noncontrolling shareholder in both companies.