RIGA - Unconfirmed reports surfaced last week that the owners of Lauma, Latvia's largest textile company, were considering selling a controlling stake to a strategic investor and that several companies have shown interest.
Company management refused to comment on the report.
"There will be no comments. There would have been comments if a specific decision was made," said Lauma Vice President Viktors Aispurs, who together with company President Zigrida Rusina, owns 64 percent of the renowned producer of women's lingerie.
Rumors of a possible deal were first reported to Dienas Bizness by company employees and were confirmed by several officials who spoke on condition of anonymity.
Kurzemes Vards, a local newspaper, wrote that several small shareholders had turned to the newspaper with concerns about a possible change of ownership at the plant.
Guntis Strazds, who is president of the industry association and a member of Lauma's council, told Dienas Bizness that interest in Lauma was enormous, with at least six potential investors having inquired about possibilities to purchase the controlling block of shares.
"However, I can confirm that a specific decision has not been made yet," said Strazds, adding that even if the shareholders decide to sell the controlling stake, the company council would exert efforts to prevent the possibility of a rival producer taking control in order to close down Lauma's production facility.
Such a possibility could not be ruled out. In 2000 the Estonian knitwear company Hipo purchased Rigas Aditajs, another knitwear maker, after pledging to invest in the company and not to change its trademark. One year later, however, the company was declared insolvent and soon liquidated.
Strazds said he believed there were no grounds for similar concerns with Lauma since the company represented the life's work of Rusina and Aispurs, who would both remain in the company as top managers even if a strategic investor was brought on board.
Lauma generated sales of 19.8 million lats (29.9 million euros) in 2003 and posted a profit of some 2.5 million lats.
The company exported some 80 percent of its output last year, of which 40 percent was delivered to European Union member states and candidate states and 60 percent to market in the East (mainly Belarus, Russia and Ukraine).
Some 20 percent of output was sold on the local market.
