TALLINN - Estonia's two biggest banks said that they would launch bankruptcy
proceedings against Saku Arena if their demands to improve the financial
health of Estonia's most advanced multifunctional entertainment center were
not met by owners.
Hansabank and Uhispank are attempting to reclaim 70 million kroons (4.5
million euros) that the loaned for the reconstruction of the facility, which
has reported increasing losses.
"As of today, Uhispank has not filed a bankruptcy proceeding against Saku
Arena," said Guido Gritsenko of Uhispank, adding that on Aug. 4 Uhispank and
Hansabank wrote a joint letter demanding immediate solutions to improve the
arena's financial situation.
"Uhispank considers that negotiations with [the arena's] current
shareholders and new investors make it possible for the arena to remain in
business," Gritsenko said.
Saku Arena is 48-percent owned by the state and the city of Tallinn and
47-percent owned by Lemminkainen, the Finnish construction group that was
the general contractor for the building.
Although Jaanus Vihand, CEO of Saku Arena, claimed that he knew nothing of
the banks' demands, he did admit that the arena's losses have been mounting.
"We are only a few million kroons behind repayment schedule," said Vihand,
admitting that the whole amount to be repaid is close to 70 million kroons.
The complex ended last year with turnover of 27 million kroons and a loss of
4.7 million kroons.
