Lithuania Business News: Archive 2003-
Saturday, 24th of January
flyLAL asked to open bankruptcy proceedings
FlyLAL-Lithuanian Airlines, which suspended all flights last Saturday due to financial troubles, has filed for bankruptcy. The airline said in a press release on Friday that it had asked the Vilnius regional court to open bankruptcy proceedings. "We looked at all possible options to continue operations, but being unable to continue flights and seeing no real possibilities for resuming our operations, we were forced to file for bankruptcy," said FlyLAL-Lithuanian Airlines CEO Vytautas Kaikaris. The airline admits that it has only short-term assets and LTL 90 million in debt that is not backed by any assets. The company owes LTL 47.5 million to its shareholders, who are its biggest creditors, and around LTL 20 million to Vilnius International Airport. Based on preliminary estimates, passengers' claims for unused flight tickets could reach another LTL 6 million.
Respublika, Lietuvos Zinios, Lietuvos Rytas
Ready to implement the project with Sweden
Lithuania's national energy company Leo LT claims it is ready to finance and implement a LTL 1.78-2.55 billion worth Swedlink project on the connection of domestic power grid with that of Sweden immediately. "We are absolutely ready to implement and finance the construction of Lithuanian-Swedish power link even if the support of the European Commission for the implementation of strategic energy projects is to be provided later or appears to be insufficient," Gintautas Mazeika, Leo LT chairman, said in a statement. Leo LT would plow LTL 0.89-1.28 billion into the project and the Swedish partners would bear similar costs, he added.
Respublika, Lietuvos Rytas
Borrows in secret
The Lithuanian Finance Ministry this week raised EUR 70.03 million via two private offerings of euro-denominated short-term government securities. Lithuania's Central Securities Depository on Thursday registered a 40-million-euro notes issue falling due on July 22, 2009, and a 30.03-million-euro notes issue due on Feb. 22, 2010. No information as to what interest the securities will pay is available to the public. The average yield on the government's 84-day Treasury bills reached 8.439 percent at the latest public auction.
Friday, 23rd of January
The number of Verslo Zinios
Lithuanian air companies carried 1.2 million passengers in 2008, up 53.7 percent versus the year-earlier figure, the Statistics Department reported on Thursday. The total volume of cargo and mail handled by the country's airlines plunged by 34.6 percent, year-on-year, to 4,200 tons. A total of 576,400 passengers (49.6 percent of the total flow) took regular flights last year, up 56.6 percent compared with 2007.
Does not rush to sell
The Lithuanian government has put off making a decision on exercising its option to sell its remaining stake in Mazeikiu Nafta (Mazeikiai Oil) to Poland's PKN Orlen until it reaches a compromise with the buyer that would allow the state to have some influence over the country's sole crude refinery. The Cabinet on Wednesday postponed adopting a resolution to delegate certain powers to Economy Minister Dainius Kreivys. The resolution should be passed before the minister's meeting with PKN Orlen's heads in Vilnius in the first half of February. "The sale of Mazeikiu Nafta shares will leave the government with no influence over the company. Therefore, we want to do everything in a civilized way, that is, to tell Orlen's representatives that we want to exercise the option and, at the same time, find a compromise over the issue of Mazeikiu Nafta's strategic [importance]," Kreivys said. Lietuvos Zinios
Lithuania is lagging well behind the EU's average in innovation performance, according to the European Innovation Scoreboard 2008 published on Thursday. Lithuania, as well as Malta, Hungary, Slovakia, Poland, Croatia, Romania, Latvia, Bulgaria and Turkey, is in the group of catching-up countries with innovation performance well below the EU average. However, unlike most other countries in this group, Lithuania's rate of improvement is below that of the EU27. The country's relative strengths, compared to its average performance, are in "human resources, finance and support and linkages and entrepreneurship" and its relative weaknesses are "in firm investments, throughputs and innovators," according to the report.
Lietuvos Rytas, Verslo Zinios
Thursday, 22nd of January
Collected fewer revenues
Lithuania's fiscal deficit totaled some LTL 3.256 billion in 2008 accounting for 2.9 percent of Gross Domestic Product (GDP), Finance Minister Algirdas Semeta told the reporters on Wednesday citing preliminary estimations. In 2007 the authorities projected that the public sector deficit would reach 0.5 percent of GDP in 2008. Late in September 2008 the government revised its fiscal deficit projections up to 2.35 percent of GDP. According to preliminary estimations, the revenues of the national budget, excluding the European Union (EU) funds, made up LTL 23.601 billion last year and were 2.9 percent or LTL 694 million below the planned amount. Including the EU funds, the national budget recorded the revenues of LTL 27.083 billion in 2008.
Lietuvos Rytas, Lietuvos Zinios, Verslo Zinios, Respublika
Resigns from his position
Tomas Kucinskas is to resign as president of Carlsberg Baltic, the Baltic unit of Denmark's Carlsberg group, effective from February 1. However, he intends to remain in beer making business and will retain his positions as chairman of Svyturys-Utenos Alus and chairman of supervisory councils of Aldaris and Saku, Carlsberg Baltic said in a statement. Carslberg Baltics controls Svyturys-Utenos Alus,the largest Lithuania's beer maker, as well as Aldaris in Latvia and Saku in Estonia. The media has recently mentioned Kucinskas as a potential candidate for Lithuania's ambassador to the UK.
Lietuvos Rytas, Verslo Zinios
Will dismiss employees
Snaige, the only household refrigerator manufacturer in the Baltics, is set to cut another 300 jobs at its refrigerator plant in Alytus, in southern Lithuania, in the first quarter of this year as part of efforts to further increase its operating efficiency and reduce manufacturing costs. The company now employs 1,100 people after 300 employees were laid off in October through December last year. "The devaluation of the local currencies in Russia and especially in Ukraine has hit not only us, but also all exporters of large domestic appliances," Snaige CEO Gediminas Ceika said. "Sales in these markets, which are very important to us, have come to a halt. At the moment, there are no signs of recovery in this quarter. Therefore, we had to cut back on our production plans and cut jobs," he said.
Respublika, Lietuvos Rytas
Wednesday, 21st of January
The number of unemployed will grow in the country
With the economic situation getting worse, about 280,000-310,000 jobseekers are expected to request the services of Lithuania's labor exchanges this year, while the unemployment level should grow to 8-10 percent by the end of the year. "The unemployment level will grow in 2009 as the companies intend to eliminate about 38,000 jobs. This is the first time when the projected balance of jobs is negative," Inga Liuberte, head of labor supply and demand division of Lithuanian Labor Exchange, said during the conference Labor Market Forecasts for 2009 on Tuesday. Almost a half of companies are planning layoffs, and the dismissals should be the largest in industry and construction, the latest survey of the Labor Exchange has shown. "Almost a half of companies intend to reduce workforce - all in all, 44 percent of the companies polled," Liuberte said.
Lietuvos Rytas, Lietuvos Zinios, Respublika
Awaits inflation again
Consumer prices in Lithuania should grow by 2.3 percent in January versus December on a harmonized basis, the country's Statistics Department projects. Annual inflation should reach 9.2 percent, while the twelve-month average should be 11 percent, it said. In January the inflation rate would be mostly affected by the raising of VAT rate to 19 percent, from 18 percent, and elimination of VAT breaks for the majority of goods, the department explained. Changes in VAT and seasonal increase in the prices of fruit and vegetables would prompt the growth of food and soft drinks prices in January. Moreover, the raising of VAT and excise duties levied on fuel would result in higher prices in the transport group. The prices of housing, water, electricity, gas and other fuel would increase as a result of higher prices of gas and electricity.
Lietuvos Rytas, Verslo Zinios, Lietuvos Zinios
The Lithuanian police together with the Lithuanian Anti-Pirate Association (LANVA) last year removed from the market more than 93,000 CDs and DVDs containing pirated copies of music recordings, films and computer games. The confiscated discs contained around half a million illegal copies of intellectual property, worth over LTL 10 million at legal prices, the association said in a press release on Tuesday. The authorities also closed a considerable number of illegal file-sharing servers (FTP and P2P) operating in Lithuania, including B4net, Splius, Alfanet and Worldnova, and around 20 sites containing such files. "We are speaking about thousands, not hundreds, of films and even more music albums and individual pieces of music. It is hard to estimate their total value, because it is impossible to find out how many times and by how many users [these files] were downloaded," LANVA Chairman Vytas said.
Lietuvos Rytas, Respublika, Verslo Zinios
Tuesday, 20th of January
After experiencing fast growth in recent years Lithuania's economy is now facing recession with the European Commission (EC) seeing the country's gross domestic product (GDP) shrinking by 4 percent in 2009 and further 2.6 percent in 2010. In 2008 Lithuania's GDP expanded by 3.4 percent, the Commission said in its latest European Union (EU) forecasts published on Monday. "The European Commission hopes that the measures put forward by the new government will mean that the recession in Lithuania will be shorter, and in 2010, even with negative growth, things will be better for Lithuania", Joaquin Almunia, European Commissioner for Economic and Monetary Affairs, said during a news conference on Monday. As projected by the Commission, the average annual inflation in Lithuania will drop to 5.6 percent in 2009, from 11.1 percent in 2008, and will go down to 4.8 percent in 2010.
Lietuvos Rytas, Respublika, Lietuvos Zinios
Postponed the case
Lithuania's Constitutional Court has adjourned the hearing in the case concerning the legality of establishing the national investor company Leo LT to January 27. New circumstances were revealed during the inquiry of experts on Friday, which made it necessary to question other experts and obtain additional documents, the court said in a statement. The case was scheduled to be heard on Tuesday, January 20. The parliament asked the court to examine the compliance of legislation, which set ground for the establishment of Leo LT, with the Constitution last fall.Verslo Zinios, Lietuvos Rytas, Respublika
Lifosa invested LTL 13.714 million
Lithuania's phosphate fertilizer manufacturer Lifosa has launched an investment project worth approximately LTL 55 million. The European Union (EU) is contributing LTL 13.712 million to the project in the form of assistance, the company has said in a statement. The project involves the construction of a new fodder phosphates line, which will be installed at the end of July 2010 boosting the company's capacity to produce that product to 150,000 tons per year.
Monday, 19th of January
Number of Verslo Zinios
Lithuania's total crude oil production declined to 128,600 tons last year, down 17.2 percent from 155,400 tons a year ago, the country's Geological Service reported on Friday. Minijos Nafta, a Lithuanian-Danish joint venture, remained the country's largest oil producer, but its output dropped by 29.8 percent to 44,100 tons, it said. Geonafta, which is controlled by the investment company Hermis Capital, saw its output fall by 19.1 percent to 39,700 tons.
Debt reaches half a billion
Lithuania's state paid off about one-third of last year's debt to budget bodies by mid-January with some LTL 155 million transferred by January 14. The state's debts to budget bodies made up LTL 501.6 million as of the end of 2008. About LTL 155 million were paid off as of Jan. 14, however, this amount is growing every day," Vytautas Lenkutis, a finance ministry representative, said. The remaining debts should be paid by the end of January and in coming months, the ministry said. Verslo Zinios, Respublika
Number of dismissals grows
Another 11,000 people were registered as unemployed with territorial offices of the Lithuanian Labor Exchange in the second week of this year -- 4,000 more than the average weekly number in December. The number of registered job-seekers reached 135,000 in mid-January, the Labor Exchange said on Friday. Some 900 job vacancies were registered on January 12 through 16. The country's official unemployment rate stood at 5.7 percent as of January 1. The average unemployment rate in 2008 reached 4.8 percent, 0.2 percentage points higher than in 2007.
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