Company briefs - 2004-02-26

The tender for Air Lithuania, a subsidiary of Lithuanian Airlines, was won by Airjus, a local freight and logistics company.

Arijus beat out five other Lithuanian-owned companies in the bidding for a 100 percent stake in the ailing air carrier, which was shackled by over 20 million litas (5.8 million euros) in outstanding debt in the first half of 2003. Arijus offered to pay 2.05 million litas for the stake, well over the starting price of 715,000 litas. "We expect to integrate the air carrier into our operations, expand its services and bring it back to profit," Arijus Ramonas, the owner of the Arijus Group, told Lietuvos Rytas.

Swedwood Latvia, a member of IKEA group and a leading producer of solid pine products, opened a 3.5 million lat (5.2 million euro) sawmill in Latvia. Funding reportedly came from Nordea Bank, and CEO Emils Akmentins said the mill would help the company improve quality and improve product flow, as well as decrease costs. Swedwood Latvia said it planned to produce 100,000 cubic meters of pine timber per year, 70 percent of which will be used for semimanufactured timber furniture.

Last week it was reported that Estonian Railways CEO Herbert Payne (see photo) will resign from the company on April 1. Payne, who began working with the company in July 2002, said he was leaving due to family-related issues. His wife and children live in the United States. Speaking of his accomplishments in Estonia, Payne said his biggest was turning Estonian Railways around and putting together a strong management team.

The leading Lithuanian business daily Verslo Zinios posted sales of 13.3 million litas (3.8 million euros) in 2003, up 11 percent year-on-year. Profits nearly doubled, and profitability reached 17.4 percent. CEO Rolandas Barysas said 2003 was the best in the paper's nine-year history, adding that the results were particularly satisfying since the current market was not favorable for the press.

The Latvian government approved the concept of a separation of Latvenergo's production, management and distribution operators, in line with EU directives. Outgoing Prime Minister Einars Repse stressed that the separation of functions, which will require amendments to the law on energy resources, does not equate to privatization. Latvenergo President Karlis Mikelsons told government ministers that there currently is a separate accounting system for each operator, though the balance sheet is common for all. He suggested transforming Latvenergo into a state-owned holding since dividing assets and liabilities would be too complicated.

Leading Estonian businessman Urmas Soorumaa is preparing to sell his 35 percent stake in the security services group Falck Eesti, the local press reported. "I have not sold any shares, but I have been thinking about it," Soorumaa told Eesti Paevaleht. "If this will improve the company's business then it could be done," he added. Soorumaa founded ESS, Falck Eesti's predecessor, in 1991, and seven years later he sold 65 percent to Denmark's Falck Group.

The accounting firm Ernst & Young won a tender to compile procedures for managing EU structural funds for the Latvian Investments and Development Agency. Auditors from the firm will reportedly have to present their manual for structural fund management by May 1. The LIDA will then announce another tender for evaluation of the handbook and teaching LIDA staff how to use it. Only after that will the government confirm the handbook.