More trouble arises in distillery sell-offs

  • 2004-03-25
  • By Steven Paulikas
VILNIUS - The turbulent saga of privatization in Lithuania's state-held distilleries continued this month, as speculation in the media threatened to destabilize the sale of alcohol producer Anyksciu Vynas.

On March 19, press reports that Alita, a rival distiller, was preparing to offer 35 million litas (10.1 million euros) for Anyksciu Vynas, a producer of fruit wines and other alcoholic beverages, triggered a rise of over 13 percent in the company's stock price.
Later the same day, however, the Baltic News Service reported that Alita's offer would not top 25 million litas.
This report followed a March 18 announcement by the State Property Fund, the agency responsible for overseeing the sale of public objects, to the effect that six unnamed companies had advanced to the final stage of the tender.
Investors were left scratching their heads, while privatization officials were irked by the misleading reports.
"I'd say this type of information was not healthy for the markets," said Antanas Malikenas, privatization director at the State Property Fund, which by the time The Baltic Times went to press had not disclosed the amounts of the bids or which company was the highest bidder.
"However, I can say that it will not affect the privatization negotiations in any way," he reassured.
The incident only further tarnished the Anyksciu Vynas tender, a 72.93 percent stake of which was on the auctioning black for the second time. The last attempt to sell the asset ended in the revelation that the chosen buyer, the Vilnius-based beverage company Artrio-2, did not have sufficient credit to close the transaction.
Yet in spite of the aborted attempt, officials are hoping that the second time around will be successful.
"An additional requirement for bidders has been added-their bid must include a letter of confidence obtained from a bank or creditor that meets specified criteria," said Malikenas.
But even if Alita is indeed the highest bidder, as the majority of media speculation holds, sufficient credit may be the least of the State Property Fund's worries for getting Anyksciu Vynas off its hands.
As the country's second-largest distiller, analysts have argued that the purchase of Anyksciu Vynas by Alita, a producer of sparkling wines, may constitute an anti-trust violation that will eventually be nixed by regulators.
The same may hold true of a potential deal that would position MG Baltic, a consortium that owns the Stumbras distillery, as Anyksciu Vynas' parent company.
Even the current political scandal could reach its long arm into the privatization, as President Rolandas Paksas' aides have been accused of meddling in last summer's tender of Alita, prompting prominent politicians such as Parliamentary Chairman Arturas Paulauskas to openly call for a review that could return Alita to public hands. o
The starting price for the block of shares on offer in Anyksciu Vynas was 8 million litas, while Artrio-2's winning yet failed bid was for 20 million litas.