Company briefs - 2004-04-01

The rating agency Standard & Poor's Ratings Services revised its outlook on Eesti Energia, the Estonian power utility, to negative from stable, citing risks arising from a potential restructuring, though the agency affirmed its A- long-term corporate credit rating for the company.

"The outlook revision reflects the risk of weakening credit quality as a consequence of a potential restructuring and split-up of Eesti Energia," said Standard & Poor's credit analyst Andreas Zsiga, adding the business risk of competitive operations was higher compared with the monopoly business, and that this could have negative ratings implications. The agency said it still considered the government's implicit support for Eesti Energia to be strong even though there are no explicit financial guarantees from the Estonian state.

Nijole Dumbliauskiene (photo), chief executive of Utenos Trikotazas, Lithuania's leading knitwear manufacturer, sold her 7.36 percent stake in the company in a 7.3 million litas (2.16 million euro) deal March 25. The multibusiness concern SBA, which controlled 46.47 percent of Utenos Trikotazas' stock as of September 2003, bought the shares, Gintautas Misiukevicius, SBA's spokesman, said. "Dumbliauskiene remains the managing director of the company after this transaction. Nothing is changing," said Misiukevicius. According to information from the National Stock Exchange, the buyer paid Dumbliauskiene 5 litas per share, which would give the company a market cap of 99.1 million litas.

According to Eesti Raudtee (Estonian Railways) executives, the company could acquire a public listing as soon as this fall, but Economy Minister Meelis Atonen said the state was not prepared to reduce its stake - 34 percent - in the strategic company, nor does the coalition agreement give shareholders the right to reduce the state's stake. "It wouldn't be practical either, because the state would then not have enough say in the development of the strategic firm," the minister said. In his opinion, Estonian Railways does not need help from the stock markets to finance its investment plans, because it can borrow funds cheaply. Analysts said that at least one-fourth of the company's stock would have to be floated so that it would be freely tradable.

Latvia's airBaltic announced on March 30 in Vilnius that it would begin offering discounted flights from the Lithuanian capital beginning in June. AirBaltic President Bertolt Flick was quoted by Agence France Presse as saying, "We are going to offer flights to Copenhagen, Hamburg, Berlin, Cologne and Dublin from June. The reservation of tickets for these flights will start on March 31." He also said that flights to Helsinki, Vienna, Warsaw and Oslo would be available beginning Aug. 15. The price of one-way tickets would begin at 149 litas (43 euros), Flick said.

Tele2 has taken hold of approximately one-third of Lithuania's domestic wireless market in terms of number of subscribers. Omnitel, the country's largest operator, held 46 percent of the market according to the results of the latest survey, conducted by the joint Lithuanian-British market pollster, Baltijos Tyrimai, in the beginning of the year. A total of 34 percent of respondents in the 15 - 74 age-group chose Tele2 as their mobile services provider, while Bite ranked third with 20 percent of the market. "We are the fastest growing Lithuania's wireless operator," said Petras Masiulis (photo), CEO of Tele2, which traditionally refuses to reveal its financial results.