RIGA - Kaija, one of Latvia's largest fish processing companies, an-nounced this week that it has completed a major restructuring by selling real estate for some 1.6 million lats (2.3 million euros).
The fishery, which has been plagued by financial problems and state regulators who want to place it in insolvency, sold the land on which the company's plant and offices. Financial director Inese Trusina said that by disposing of the real estate the company would be able to cut production costs per unit and also save on recurrent costs.
Trusina confirmed that Kaija finished 2003 with a loss, though she declined to specify how much. The company is also shackled with debt, and last month the Latvian Privatization Agency threatened to have the company declared insolvent for its refusal to pay a 39,482 lat debt to the agency.
Kaija was even expelled from the Latvian Fisheries Association last year for failing to pay membership fees.
Last year the fishery was forced to cut production to 25 - 30 percent of capacity due to a lack of working capital and as a result was unable to meet consumer demand. Experts say that Kaija subsequently ceded market share to Lithuanian competitors. They also say that only a foreign investor is capable of rescuing the company.
The Riga Stock Exchange board said it had decided to move Kaija from the second list to the supervision list since the issuer has not complied with market safety and investor protection requirements. A stock exchange spokesperson said that Kaija had repeatedly violated rules on transparency, including delays in submitting quarterly reports.
Kaija underwent a change of shareholders in August 2002 when Latvijas Krajbanka sold a 67.75 percent stake to three companies that were registered in the U.S.A., U.K. and Lichtenstein. Imants Kalnins, chairman of the board of Kaija, bought out 49.5 percent of shares from these companies in May 2003.
Kalnins said in December that the financial situation at the company was stabilized but that a significant improvement would occur only after additional resources were raised. He said talks were ongoing with both banks and strategic investors.