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Lithuania Business News: Archive 2003-2006

WEEK 44.2006

Saturday, 4th of November

Owner of LAL bids for Hungary's Malev
LAL Investiciju Valdymas (LAL Investment Management), the sole shareholder of Lietuvos Avialinijos (Lithuanian Airlines, or LAL), has submitted a bid for a 99.95 stake in Hungary's state-owned air carrier Malev. LAL Investiciju Valdymas is one of four bidders for the stake in Malev, which is one of Hungary's biggest airlines, Hungary's state privatization agency APV reported.
The other three bidders for the sate-owned stake in Malev are two companies - AirBridge Magyarorszag Zrt and Sky Alliance Zrt - and a private individual, Ofer Hava.
Lietuvos Zinios

Yukos International moves to replace Mazeikiu Nafta’s supervisory board
Yukos International UK, the majority shareholder of Lithuania's Mazeikiu Nafta refinery, proposes to replace the supervisory board of the Lithuanian company. The Dutch-registered subsidiary of Russia's bankrupt oil giant Yukos proposed to put this issue on the agenda for the next shareholder meeting at Mazeikiu Nafta, scheduled for December 5. According to the sources, Bruce Misamore, one of the two members of Yukos International UK's management board, made this proposal in a letter to Mazeikiu Nafta Board Chairman Nerijus Eidukevicius on Friday. Eidukevicius neither confirmed nor denied having received such a letter.
If the supervisory board were replaced, it would also replace the management board, which is now comprised of four representatives from Yukos and three representatives from the Lithuanian government.
Four Yukos-appointed members of the management board intend to vote on Sunday to dismiss Paul Nelson English from his post of managing director. A decision to fire the American-born managing director would have to be approved by the supervisory board. If it were not approved, the four Yukos representatives would most probably resign.
Kauno Diena

Lidl sells 1 land plot in Lithuania, more in Latvia
German discount chain Lidl has so far managed to sell only one of the plots of land it owns in Lithuania. The company announced that it was selling the plots of land, which it had purchased for discount stores, in mid-October. Unofficial sources have said that Lidl has until now sold one land plot in Vilnius and 27 more are still up for sale.
The company is faring better in neighboring Latvia, where it has sold 11 out of 13 land plots. The two unsold plots are located in Daugavpils.
The German retailer registered a subsidiary company in Lithuania in late 2002 and purchased land in different locations. However, it is pulling out of the country without having opened a single store.
Lietuvos Zinios

Friday, 3rd of November

Geonafta cleared to buy 50 percent of Genciu Nafta from Arab billionaire
Lithuanian oil production company Geonafta, which is controlled by the investment firm Hermis Capital, has obtained the green light from the Competition Council to acquire up to 100 percent of shares in Genciu Nafta, another local oil driller. Geonafta, which now holds a 50 percent stake in Genciu Nafta, intends to buy, for an undisclosed amount of money, the other 50 percent of shares from Sweden's Svenska Petroleum Exploration, which is owned by Saudi-Ethiopian billionaire Mohammed Al-Amoudi. The deal is yet to be approved by the Lithuanian government.
Geonafta said earlier that it had inked a letter of intend with the seller of the shares and would sign an agreement after all the necessary approvals had been obtained.
Geonafta currently operates four oil fields, which produced 45,780 m3 of oil during the first nine months of this year.
Lietuvos Zinios, Lietuvos Rytas, Verslo Zinios

Kaunas Airport invites bids for terminal extension
Kaunas International Airport in Lithuania has invited bids for a contract to build an extension to its terminal. The airport said in a statement that it planned to extend the terminal by some 3,000 m2 until October 2007 in order to comply with the Schengen requirements. It said earlier that investment in the project might reach around LTL 10 million. Kaunas Airport has a 3.25-kilometer-long runway that can accommodate any type of aircraft. Its annual passenger capacity is 500,000. With the arrival of foreign budget airlines, the airport saw a fourfold increase in passenger traffic to 80,000 last year and expects passenger numbers to rise further to 300,000 this year.
Kauno Diena

Lithuanian gambling industry wins LTL 129.04 million
Gamblers left behind LTL 129.04 million in Lithuanian gaming establishments during the first nine months of this year, up 42.5 percent from LTL 90.54 million they lost a year earlier. Gaming operators posted revenues of LTL 595.4 million for the nine months, up 47.3 percent year-on-year, and distributed LTL 466.37 million in winnings, up 48.8 percent.
According to preliminary data, gambling and lottery taxes generated LTL 14.2 million in state revenues during the nine months, up 26.8 percent year-on-year. There were 14 gaming operators in the country in the reporting period, including eight casinos, four limited prize slot machine operators and three betting agencies.
Last year, the gambling industry's annual revenues totalled LTL 575.6 million, of which LTL 445.7 million went back into gamblers' pockets.
Kauno Diena, Lietuvos Rytas

Thursday, 2nd of November

VST raises profit
Lithuanian power distribution company VST said its pretax profit for the first nine months of this year rose by 13.2 percent from a year earlier to LTL 54.4 million. The company, which operates the western part of the Lithuanian national power grid, posted a net profit of LTL 48.472 million for the full year 2005, more than an eight-fold increase from the previous year. Revenue grew by 17.9 percent to LTL 846.7 million.
Respublika, Lietuvos Rytas

Sweden's Svenska Spel set to enter Lithuanian lottery market
Swedish state-owned gaming company Svenska Spel is poised to enter the Lithuanian lottery market. The State Gaming Control Commission (SGCC) has issued a license to operate lotteries to Winloto, a joint venture between Svenska Spel and a company associated with Lithuania's Olifeja.
"I believe that the entry of a new player into the market will be good for consumers. Even more so because Svenska Spel has a long tradition of organizing lotteries and pays great attention to responsible gaming," said Andrius Karaliunas, the SGCC administration director.
He said that Winloto will focus on online lotteries, but will also run traditional lotteries.
In Lithuania, Olifeja currently offers two online lotteries. Zalgirio Loto also plans to enter the online lottery market.
Five companies have held licenses to operate lotteries in Lithuania until now, namely: Olifeja, Zalgirio Loto, Fortuna Baltica, Televizijos Loterijos and Garsuva.
Lietuvos Rytas

Isomerization unit at Mazeikiu refinery repaired
Mazeikiu Nafta refinery, which sustained significant damage from a major fire three weeks ago, morning halted its 50-million-US-dollar isomerization unit due to a malfunction on Tuesday, but was planning to restart it in the evening.
Mazeikiu Nafta spokesman Giedrius Karsokas said Wednesday evening that the installation had been repaired and the plant would begin restarting it shortly. No one was hurt in what the company described as "a minor production incident" and there was no damage to the environment.
Karsokas said earlier that the refinery continued to operate at a capacity of around 15,000 tons per day, which is half its pre-fire capacity.
Verslo Zinios, Lietuvos Rytas

Tuesday, 31st of October

Head of Lithuania's Mazeikiu Nafta does not intend to resign
The managing director of Lithuania's Mazeikiu Nafta refinery said on Monday that he does not intend to resign from his post after four Yukos representatives on the company's management board have expressed their no-confidence in him.
English said that, to his knowledge, Poland's PKN Orlen, which is buying Mazeikiu Nafta, does not want to replace the company's management, although there is no agreement on this issue with the Poles yet. "But they have made it clear to me that they are more than satisfied with my management of the company in the past and expect to work with me in the future," he said.
English also said that he has acquainted himself with the arguments set out by the Yukos representatives, but declined to comment on them.
Economy Minister Vytas Navickas said that the Economy Ministry will discuss on Saturday how to vote at Mazeikiu Nafta's board meeting on Sunday. Before that, it wants to see what position the management board of Yukos International UK BV, the majority shareholder of Mazeikiu Nafta, will adopt during its meeting on Thursday or Friday.
Lietuvos Zinios, Lietuvos Rytas, Respublika, Kauno Diena, Verslo Zinios

Snoras invests EUR 2.8 million in UK bank
Lithuanian bank Snoras, which is controlled by Russia's Conversbank, said on Monday that it has made a 2.83-million-euro equity investment in Conversbank UK and owns 100 percent of the shares in the UK-based bank. Snoras said that the share capital of Conversbank UK, formerly Pointon York, has increased to EUR 4.54 million.
The Lithuanian bank announced the acquisition of Pointon York, a bank much smaller than itself, in April. However, international rating agency Fitch said in September that it was merely an acquisition made in a trust on behalf of Valdimir Antonov, the majority owner of Conversbank.
The Lithuanian bank also holds a majority stake in Latvijas Krajbanka, Latvia's oldest bank.
Lietuvos Zinios, Respublika, Verslo Zinios

Retail sales grew 14 percent
Lithuanian retail sales grew by 14 percent in the first nine months of this year from a year earlier to reach LTL 19.125 billion. In September compared with August, however, retail sales fell by 0.9 percent. Food retailers boosted their aggregate turnover for the nine months by 6.4 percent, while non-food retailers, excluding motor sales, posted an 8.5 percent decline in sales. The strongest year-on-year growth rate, 35.2 percent, was recorded by textile, clothing and footwear retailers.
Lietuvos Zinios

Monday, 30th of October

Snaige posts lower profit
Snaige, the household refrigerator manufacturer, expects to miss its full-year targets after consolidated pretax profits for the first nine months of this year slumped to LTL 820,000. The result for January-September is 24 times lower compared with that in the same period last year. Sales for the nine months fell by 10.7 percent year-on-year to LTL 251.6 million.
"Due to a very strong competition from local, well-known brands and to the specific conditions on the Russian market, our initial sales and marketing strategy has proved unsuccessful," Snaige CEO Mindaugas Sestokas said in a statement.
"Therefore, we will not meet out 2006 goal," he added.
Lietuvos Zinios

Vilniaus degtine raises net profit
Lithuanian alcoholic beverage producer Vilniaus Degtine, which is controlled by the French group Belvedere, said its net profit for the first nine months of this year rose to LTL 4.1 million, up 7.9 from LTL 3.8 million a year earlier. Revenues for January-September increased by 44.7 percent to LTL 43.3 million, as sales surged by 59.8 percent to LTL 7.7 million of beverages.
The Vilnius-based distillery said that it aims to boost full-year revenues to LTL 63 million this year, up from LTL 47.075 million last year. Sales are forecast to rise by 42 percent to 10.8 million litres.
Lietuvos Zinios

Part of Mazeikiu Nafta's board members express non-confidence in CEO
Representatives of Russia's Yukos, the majority shareholder of Mazeikiu Nafta, on the Lithuanian oil refinery's management board have expressed their no-confidence in Paul Nelson English, the company's managing director, and will seek his dismissal. Mazeikiu Nafta's board members were informed about that during their meeting on Saturday. The company's shareholders - Yukos International UK BV and the Lithuanian government - have been informed in writing. The Dutch-registered subsidiary of Yukos holds a 53.7 percent stake in Mazeikiu Nafta.
Mazeikiu Nafta Chairman Nerijus Eidukevicius confirmed that Yukos' four representatives on the board have expressed their no-confidence in English and that the board intends to hold a vote of no-confidence in the managing director during its November 5 meeting. However, Eidukevicius declined to comment on the motives for the no-confidence motion.
Meanwhile, Economy Minister Vytas Navickas said that, to his knowledge, Yukos International UK BV has expressed confidence in English. He plans to meet both with English and Yukos' representatives on Tuesday.
Saulius Specius, an aide to Prime Minister Gediminas Kirkilas, said that the expression of no confidence by the board members does not have any major effect on the running of the company until a vote has been held.
Kauno Diena, Lietuvos Rytas, Respublika, Lietuvos Zinios

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