Observer "Lietuva"

Lithuania Business News: Archive 2003-

WEEK 33/2009

Saturday, 15th of August

National Holiday.

Friday, 14th of August

The Government has recently borrowed LTL 7.6 billion
Lithuania's Finance Ministry issued privately the government securities with the total par value of LTL 581.8 million on domestic market in July. The average weighted coupon of the issue made up 7.26 percent. The securities were acquired by DnB Nord, Danske bank, Swedbank and SEB bank in July. The Government borrowed from DnB NORD bank aand SEB bank in June. Moreover, the Government borrowed LTL 138 million from Nordea bank. In totol, it was borrowed LTL 761.8 million in July. Moreover, the ministry auctioned publicly the securities with the total par value of LTL 180 million and the average weighted coupon of 8.01 percent in July.
Verslo Zinios

Rokiskio Suris will buy its own shares again
Rokiskio Suris (Rokiskis Cheese), the leading Lithuania's dairy company, aims to create a LTL 10 million reserve for the repurchase of own shares, the purchase price of which could range from at least LTL 1 to not more than LTL 12 per share. The shareholders will vote on the proposal at the meeting due on August 31. They would also decide on the annulment of a 10 percent stake already bought out by the company. The company shall annul the shares, which it has already purchased, if it wants to continue the repurchase of own stocks since, as outlined in the Law on Public Companies, a company cannot hold more than 10 percent of its authorized capital. With the abovementioned stake annulled, the authorized capital of Rokiskio Suris would decline to LTL 38.445 million. Rokiskio Suris seeks to purchase own shares in an attempt to maintain and boost their price.
Verslo Zinios

Part of the asset of Norfa Mazmena was arrested
Vilnius District Court announced that asset, worth LTL 71,535, belonging to Norfa Mazmena, was justly arrested. The company Serneta related to Latvian multimillionaire Sergj Rachinstein attempted to receive this sum of money from Norfa Mazmena. Serneta rented accommodation to Norfa Mazmena and stated that the company did not pay the rent. Norfa Mazmena did not agree with temporary protection conditions and appealed against the decision.
Verslo Zinios

Thursday, 13th of August

Sold Eurocom
Maxima LT, which manages the biggest retail trade network, sold a company of mobile connection Eurocom. Maxima LT states that at this moment it is thinking about sale of other companies Eurocom Plius and Eurocom SIP. Telco Consulting Group, the company of Lithuanian capital, which provides services of telecommunication business consultation and management, became the owner of Eurocom on Tuesday.
Lietuvos Rytas, Verslo Zinios

Growth of salary is in the past
The Statistics Department announced that real wages in Lithuania's economy, including sole proprietorships, rose by 10.1 percent in 2008 year-on-year. Real wages in the public sector increased by 13.8 percent, and in the private sector - by 8.2 percent in the reporting period. Average monthly gross pay rose by 19.4 percent, year-on-year, to LTL 2,151.7 in 2008. In the public sector, the average monthly gross pay increased by 23.4 percent, to LTL 2,334.9, and in the private sector - by 17.2 percent, to LTL 2,058.3. Last year the gross pay was the largest in the financial and insurance sector (LTL 4,133), public administration and defence, as well as mandatory social insurance sector (LTL 3,068.8), and electricity, gas, steam supply and air conditioning sector (LTL 2,917.9).

New tax in September
State Tax Inspectorate informs that tax payers should hurry to reprogram electronic cash-registers in order new 21% VAT would be indicated in receipts. State Tax Inspectorate will consider important circumstances due to which companies have not been able to reprogram cash-registers in time and will not consider it as violation. In this case, a company may show old VAT in receipts but new VAT has to be indicated in a cashbook.

Wednesday, 12th of August

Debts of companies
The total debt portfolio of Lithuania's companies soared more than 2.5 times in the first seven months of this year, to reach LTL 2 billion as of end-July. The credit risk management solutions company Creditinfo Lietuva reported that in July alone, the debt figure grew by LTL 300 million, whereas in June the amount increased by LTL 200 million. The increase in the number of new debtors appeared to slow down somewhat, yet the debt portfolio is still growing fast with companies falling victims to the economic crisis. According to the data of Creditinfo Lietuva, 2,303 new arrest cases of company asset were recorded in July, which was by 77% more than last month.
Respublika, Lietuvos Rytas, Verslo Zinios

Government wants to eliminate LEO LT
The Lithuanian Cabinet next Monday is convening an extraordinary meeting to discuss the issue of breaking up the national energy company Leo LT. The Ministry of Energy has already prepared offers for the Government to eliminate LEO LT. Leo's shareholders are expected to take decisions on the company's liquidation or reorganization on September 4. This issue is yet to be added to the agenda of the extraordinary meeting of shareholders. The President Dalia Grybauskaite expressed a wish to break up this company as soon as possible in her letter to the Government. The Lithuanian government owns 61.7 percent of Leo LT and NDX Energija, a company controlled by the owners of VP Group, holds the remaining 38.3 percent.
Lietuvos Rytas, Verslo Zinios

Calculated losses
The Lithuanian banking operations of Danske Bank, one of the biggest banks in Scandinavia and in Western Europe, suffered LTL 205 million in pretax losses in the first half of this year after setting aside LTL 203 million in provisions for loans. The group's first-half income in Lithuania fell by nearly 48 percent year-on-year to LTL 33 million. Activity expenditures declined almost by 27percent up to LTL 35 million.
Lietuvos Rytas, Verslo Zinios

Tuesday, 11th of August

Accommodation sellers and buyers are still on holidays
Lithuanian real estate market is still listless: this month only 32 new flats have been sold or reserved in Vilnius, Kaunas and Klaipeda. However, buyers’ interest in purchasing flats is increasing. Rates of new flats sales reduced and reached a bottom of recent years in July. Matas Macijauskas, the head of the company, claims that such low rates show that potential buyers have postponed their decisions for future. This situation encourages real estate developers and sellers to take some steps. A part of new finished objects are not introduced in the market and many unfinished projects are stopped. Average prices of new flats have declined by a tenth in Vilnius, almost by a fifth in Klaipeda and by 2% in Kaunas from January 2009. Macijauskas maintains that prices have stopped to decline because demand of cheaper flats is decreasing in the market for some time.

Prices did not stop to decline
The Statistics Department reported Consumer prices declined by 0.8 percent in Lithuania in July versus June, marking the fourth consecutive month of deflation. Annual inflation reached 3 percent, while the twelve-month average was 7.9 percent. The prices of consumer goods declined by 1.1 percent from June and increased by 1.8 percent versus July 2008. The prices of services increased by 0.4 percent month-on-month, while the annual increase was 6.7 percent. In July versus June, the consumer price index (CPI) was largely influenced by the declines of 3 percent in the prices of clothing and footwear, of 2.4 percent in the prices of housing, water, electricity, gas and other fuel, and of 1 percent in the prices of food and soft drinks. The overall decline was somewhat offset by the increases of 1.4 percent in the prices of leisure and culture and of 0.6 percent in the prices of healthcare goods and services. The annual rate mostly resulted on the increases of 17.1 percent in the prices of healthcare goods and services, of 12.6 percent in the prices of beverages and tobacco, and of 12.3 percent in the prices of housing, water, electricity, gas and other fuel.
Lietuvos Rytas, Respublika, Verslo Zinios

LTL 1.5 billion for bad times
There was LTL 1.534 billion in Lithuanian Reserve Fund at the end of the first half-year, which is by LTL 500 million more than in 2008. The fund was supplemented by the money received for sale of stocks of Mazeikiai nafta. Antanas Mackevicius, the head of State Fund Department of the Ministry of Finance, explains that the fund is like a factor of macroeconomics stabilization, whereas its money is used for administration of state loan and financing of pension reform. This year almost LTL 516 million was allocated for state loan administration and LTL 495 for expenses of pension reform.
Verslo Zinios

Monday, 10th of August

The number of Verslo Zinios
Lithuania's producer prices fell by 19.4 percent in July versus the same period a year ago and were down by 2 percent compared with May, the Statistics Department reported on Friday. Excluding the impact of oil product prices, the producer price index dropped by 10.9 percent on a year-on-year basis and was down by 1.6 percent month-on-month, it said. The monthly decline in the index was mostly due to decreased prices for refined petroleum products (down 3.5 percent), chemical products (down 4.8 percent) and electricity (down 4.5 percent). This was partly offset by increased prices for waste management and remediation services (up 4.1 percent), rubber and plastic goods (up 0.7 percent), food products (up 0.1 percent) and furniture (up 0.4 percent).
Verslo Zinios

The second goal of Snoras
According to unofficial information, Snoras Media Investicijos (SMI), a subsidiary of bank Snoras, is negotiating on the purchase of a media group Diena Media. The chairman and the director-general of SMI Naglis Stancikas refused giving an official comment on the news, while the director-general of Diena Media Robertas Berzinskas denied the information that the media group was about to be sold.
Verslo Zinios

Rimi sold less
The turnover of Rimi Lietuva, which manages one of the biggest trade centres in Lithuania, was EUR 143.5 million without VAT in January-July this year, which is by 8.7% less than during the same period last year. The turnover of this company decreased by 16.4% up to EUR 19.5 million in July in comparison with last July. The turnover of Rimi Baltic declined by 7.3% up to 696.4 million in the first seven months of this year in comparison with January-July last year. Rimi Baltic manages 243 trade centres in the Baltic States: 101 in Latvia, 74 in Estonia and 64 in Lithuania.
Verslo Zinios

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