Company needs 13 million euro loan for arena

  • 2004-02-05
  • By TBT staff
RIGA - Multihalle, the firm awarded the contract to build the main ice hockey arena for the 2006 World Ice Hockey Championship set to take place in Latvia, has asked the government for a 13 million euro loan guarantee before it begins construction.

Kirovs Lipmans, head of Latvia's Ice Hockey Federation, blamed the Riga City Council for the current impasse and asked for financial assistance from the state to solve the problem. State funds, he said, would allow for loans to be taken out to finance the construction, according to the company.
"If we were not short of time we would definitely find an investor," Ojars Kehris, part owner of Multihalle, was quoted by the Baltic News Service as saying.
The long-delayed construction of the arena has sparked outrage in Latvia, where many politicians are pointing fingers and attempting to place blame.
"Latvia's prestige is at stake," Foreign Minister Sandra Kalniete said of the possibility of losing the championship. She added that the government is now being "blackmailed" over the project.
Prime Minister Einars Repse said that his former deputy Ainars Slesers, whom he fired Jan. 26, was partly responsible for the problem.
He was also reportedly skeptical of state intervention in the construction project, questioning the viability of the company's plan because it could not woo banks and required a state guarantee.
The government has asked for a detailed plan to be submitted by Feb. 12, after which it will reach a decision on whether or not to help finance the construction.
If the state were to intervene and provide financial backing, the rocky relationship between Multihalle and the Riga City Council would end. The City Council had asked for a 70 percent stake in the arena project, allowing Multihalle to buy out the city by 2008.
The deadlock between Multihalle and the City Council arose over control of the complex; the latter has publicly stated that it wants controlling interest if the city supplies the land. Multihalle, meanwhile, has been reluctant to cede power to the city.
The project was to be financed by land granted by the city as collateral against bank loans.
Multihalle has estimated the total coast of the construction at 26 million euros, with half of the total sum provided by the company through secured funds and other investments and the remainder financed with bank loans.
Construction must begin soon or the arena will not be ready in time and Latvia will lose the games