VILNIUS - The new management at the recently privatized distillery Stumbras announced that it was lending more than 70 million litas (20 million euros) of its cash to an unnamed beneficiary.
The loan was approved by company shareholders Nov. 21, and officials of MG Baltic, whose subsidiary Mineraliniai Vandenys bought the distillery last month, stressed that the transaction was confidential.
News of the loan confirmed the suspicions of market analysts who said during Stumbras' privatization that investors were after the distillery's cash as much as the company itself.
In early October Stumbras' investments and time-deposits were estimated at 72.1 million litas, nearly 20 million litas more than a year ago.
The company has no outstanding loans to banks.
Given the company's heavy cash position, there had even been speculation that Stumbras would ultimately be privatized using its own funds, but MG Baltic officials rejected these rumors, saying such a move would be illegal.
Last month it was reported that MG Baltic's subsidiary Mineraliniai Vandenys signed a syndicated loan agreement with two banks in order to purchase Stumbras. Vilniaus Bankas and Vereins-und Westbank issued the alcohol wholesaler a 135 million litas loan for eight years.
Darius Mockus, president of MG Baltic and now chairman of the board of Stumbras, at the time said the syndicated loan would help acquire Stumbras and restructure its operations.
Mineraliniai Vandenys acquired the 91.95 percent interest in Stumbras for 152 million litas. The investor is obliged to make 40 million litas in investments in the company over the next three years.
Mineraliniai Vandenys said it would pay for 70 percent of the shares with the borrowed funds and the rest with its own funds.
Upon purchasing the distillery the new shareholders reshuffled management, appointing MG Baltic vice president and chairman of the Mineraliniai Vandenys board, Arturas Listavicius, the new CEO.
"We are not planning to make any major changes. The most important task is to increase sales domestically and abroad. We will pay more attention to marketing and will implement a bio-fuel project at the Silute spirit plant," Listavicius said at the time.
