VILNIUS - After a scandal-ridden privatization saga, Lithuanian alcohol wholesaler Mineraliniai Vandenys has signed an agreement pledging to pay 152 million litas (44 million euros) for the 91.95 stake in Stumbras, the country's largest vodka producer.
The privatization committee of the State Property Fund, which had announced its approval for such a deal at the end of September, signed the Oct. 21 agreement on the sale Stumbras.
Povilas Milasauskas, chief executive officer of the State Property Fund, signed off on the transaction along with Mineraliniai Vandenys Chairman Arturas Listavicius.
The tender for Stumbras had been the source of much controversy this past summer, particularly after officials rejected a bid from the Latvian alcohol producer Latvijas Balzams even though the company's bid of 158 million litas ranked highest in the competition.
Milasauskas said the litigations surrounding the privatization of the distillery would continue until the courts had finished dealing with them.
"However, we believe that the rulings over those disputes will be favorable for the authorities," he told the Baltic News Service.
According to BNS, the manufacturing of biofuel at the Silute spirit plant, owned by Stumbras, will see investments that could reach 15 million litas within two to three years.
Biofuel production at the plant is expected to commence in 2004, as EU requirements will outline that consumption of such fuel should reach 2 percent.
The new owners of the Stumbras distillery told reports that their plans aim to see the output of the company increase 20 percent to 25 percent in the next few years.
In order to create the necessary financial conditions for the purchase, MG Baltic raised funds through an eight-year 135 million litas syndicated loan, with the cooperation of Vilniaus Bankas and the Vilnius office of Germany's Vereins und Westbank.
The privatization program of Stumbras outlines that over the next five years the buyer must seek and secure government approval before altering the business of the alcohol company. This applies to the company's juice production section as well.
The program also specifies that for at least one year the investor should retain 90 percent of the jobs at the distillery, which currently employs 670 people.
Last month, when rejecting the bid from Latvijas Balzams, officials had claimed that the company was an "unsound producer" with dubious shareholders. The Latvian alcohol producer had its legal complaints thrown out of Lithuanian court in August.