Observer "Lietuva"

Lithuania Business News: Archive 2003-

WEEK 41/2009

Saturday, 10th of October

Bought up only remains
Sweden's TeliaSonera purchased a mere 2.88 percent of stocks in the Lithuanian telecoms company Teo LT after its tender offer expired on Friday. TeliaSonera, which now owns some 60 percent of Teo, sought to buy another 35.33 percent of the stock capital at LTL 1.83 per stock. The company East Capital managed to increase a number of TEO stocks from 4.26 percent to 5.54 percent.
Lietuvos Rytas

Both import and export has declined
The Statistics Department reported that Lithuania's exports fell by 32.3 percent in the first eight months of this year from a year earlier, to LTL 25.6 billion, while its imports slumped by 42.7 percent, to LTL 28.9 billion. The country's foreign trade deficit narrowed by 73.8 percent to LTL 3.3 billion over the reporting period. Excluding mineral products, the country's exports fell by 27.9 percent, while imports shrank by 42.8 percent in the reporting period.
Respublika, Lietuvos Rytas, Lietuvos Zinios

Budget is exceeded
The Finance Ministry reported that Lithuanian central government collected LTL 11.274 billion in budget revenues in the first nine months of this year, exceeding its revenue target for the period (LTL 11.177 billion) by LTL 97.1 million or 0.9 percent. Total revenues, including assistance funds from the EU and other foreign countries, amounted to LTL 15.834 billion, including LTL 4.559 billion in the EU funds, in the reporting period.
Respublika, Lietuvos Rytas

Friday, 9th of October

Prices have increased a little
The Statistics Department reported that Lithuania's consumer prices edged up by 0.6 percent in September compared with August, reversing five months of decline. The 12-month inflation rate in September reached 2.7 percent and the average annual inflation rate was 6.4 percent.
Lietuvos Rytas, Lietuvos Zinios, Verslo Zinios

Determined by Mazeikiai stocks
Foreign direct investment (FDI) in Lithuania totaled LTL 33.3 billion in early July, up 3.3 percent from a quarter ago and up 5.5 percent compared with the start of the year. The Statistics Department announced that FDI reached LTL 32.3 billion on April 1, whereas on January 1, it constituted LTL 31.6 billion. Comparing FDI in July 2009 with last July, FDI decreased by 3.85 percent. The FDI growth in the second quarter was largely due to the sale of the government's 10 percent stake in Orlen Lietuva (formerly Mazeikiu Nafta). FDI per capita stood at LTL 9,981 as of early July, up from LTL 9,431 in early January.
Lietuvos Zinios, Lietuvos Rytas

Achiever of EU finances
Lithuania outpaces other European Union (EU) Member States in terms of structural funds absorption. A total of EUR 538.39 million or 7.9 percent of the amount earmarked from the Structural Funds for 2007-2013, has already been disbursed to Lithuania. Prime Minister Andrius Kubilius has stated that monetary resources of the EU funds are a significant support for the country's business and the whole economy during the period of economic slowdown, which is accompanied by a decline in budget revenues. From his view, the EU funds are the source of financing, which should be used as intensively as possible now. Ireland ranks the second in terms of structural funds absorption (6.1 percent) and is followed by Estonia (4.8 percent) and Germany (3.9 percent).
Verslo Zinios

Thursday, 8th of October

Will join companies?
Energy Minister Arvydas Sekmokas claimed that Lithuania's two power distribution grid operators, Vakaru Skirstomieji Tinklai (VST) and Rytu Skirstomieji Tinklai (RST), may be merged in order to achieve greater efficiency and make their electricity prices uniform. "We must seek to improve the companies' efficiency, which was not really sufficient. Both of them were natural monopolies, which did not have the stimulus from the market to operate in the most efficient way. Perhaps VST's efficiency was slightly higher. We should consider unifying the tariffs in the interest of consumers. The second issue is how to increase the efficiency and would it not be more efficient to have a single distribution company," Sekmokas said. “This issue arose after it turned out that VST and RST might have different tariffs," he said. Sekmokas said that the Energy Ministry would soon hire a consulting company to answer the question whether VST and RST would be more efficient when combined or when operating separately.
Lietuvos Rytas, Respublika, Verslo Zinios

Snoras bank is raising authorized capital
Lithuanian commercial bank Snoras is intending to raise authorized capital by additional contributions. The bank board is organizing a shareholders’ meeting to discuss this issue on November 5. Partial change of articles, cancellation and election of members of Observers Council will be also discussed. It has been announced that the Bank of Lithuania indicated Snoras bank to strengthen its capital base. Additional requirements regarding restraint of risk of this bank activity have been also set.
Verslo Zinios, Lietuvos Rytas

Fewer clients chose airBaltic
The passenger numbers of the Latvia's national airline Airbaltic reached 302,400 in the first nine months of this year in September in Lithuania, whereas during the same period last year the number of passengers was 552,600. Last year planes of the company flew only from Vilnius airport, while this year planes have flown from Palanga since April and from Kaunas since June. Rosita Sakalauskaite, the coordinator of marketing and public relations of the Lithuanian subsidiary of airBaltic, states that this data cannot be compared because planes have flown from three airports this year, whereas last year they flew only from one. 19,600 passengers flew via Palanga airport in April-September this year and only 10,700 passengers flew via Kaunas airport in June-September. Vilnius airport carried 272,100 passengers in January-September this year.
Verslo Zinios

Wednesday, 7th of October

TeliaSonera does not intend to change its strategy
Official offer of Swedish company TeliaSonera to buy 100 percent stocks of TEO LT is finishing this Friday. The price of a stock offered is LTL 1.83. The company East Capital offered to buy 4.67 percent of TEO stocks for LTL 1.95 per stock on Monday. However, Per-Arne Blomquist, the Executive Vice President and Chief Financial Officer of TeliaSonera, states that the company is not going to change its strategy and to increase price of TEO LT stocks since the price is set according comprehensive calculations. He maintains that TeliaSonera is a strategic investor and it is interested in long-term development of TEO LT and telecommunications services in Lithuania. Blomquist emphasizes that TeliaSonera does not intend to repeat an offer in case it does not succeed to implement the present plan.
Lietuvos Rytas

Will borrow a billion?
According to unofficial sources, Lithuania's government launched the sale of a new US dollar-denominated bond issue on the international markets. The placement should be completed later on Tuesday. However, the representatives of the ministry would not comment whether the placement of bonds had been launched. The issue, as reported by Bloomberg sources, may reach up to USD 1 billion (approx. LTL 2.35 billion).
Lietuvos Rytas

Authorized capital of City Service will increase
City Service, the Baltics' leading property maintenance and administration services provider, is set to boost its authorized share capital by LTL 2.5 million to finance new acquisitions. City Service's shareholders decided to increase the share capital to LTL 31.61 million from LTL 19.11 million through additional contributions on October 5. Lithuania's Rubicon Group holds the biggest stake in City Service.
Verslo Zinios

Tuesday, 6th of October

Will offer to fly to Moscow
Russia's air carrier Yamal may launch flights on Vilnius-to-Moscow route this fall. The flights could be launched in October or November, the representatives of Avia Solutions Group, the Lithuanian company cooperating with Yamal. The Russian company has presented documents to Administration of Civil Aviation in order to get permission to carry passengers.
Lietuvos Rytas, Verslo Zinios

Spit of East Capital to TeliaSonera
Investment group East Capital offers to sell 4.67 percent of stocks in Lithuania's telecoms company TEO LT at LTL 1.95 per stock, which is LTL 0.12 above TeliaSonera's buyout offer price. Majority shareholder of TEO, Sweden's TeliaSonera, has made a cash offer to buy up to 100 percent of TEO stocks at LTL 1.83 a stock. The offer is valid till October 9. East Capital announced earlier that the price offered by TeliaSonera was too low. Aivaras Abromavicius, the partner of East Capital, working in Moscow, stated that their aim was to increase their present portfolio of TEO stocks because TEO LT was a stable company and paid good dividends. East Capital owns about 3 percent of TEO stocks.
Verslo Zinios, Lietuvos Rytas

Will not enter the market
A top executive of the UK bank Barclays said in Vilnius that it was too early to speak about regular banking operations in Lithuania. Frits Seegers, the bank's head of retail and commercial banking, was asked whether Barclays had an intention to launch regular banking operations in Lithuania. He answered that they were newcomers to this market and before a decision could be taken, the market should be thoroughly analyzed. Now they were setting up an IT center in Vilnius and at the moment it was too early to speak about banking operations in Lithuania. The Lithuanian Economy Ministry is seeking to attract large foreign banks, including the UK's Lloyds, Barclays Capital and HSBC, to the country. Lithuanian Economy Minister Dainius Kreivys and Seegers on Monday formally endorsed an investment agreement between the government and Barclays Technology Center on the establishment of an information technology center in Vilnius. The agreement was signed last week.
Lietuvos Zinios

Monday, 5th of October

Will further make publishing house famous
The company Alma Littera bought four bookshops Baltos Lankos (White Meadows) last week. However, the new owners are not going to change a name of bookshops or their business conception. Price of a network of these bookshops is not known. The company Alma Littera manages a network of bookshops Pegasas, thus permit of the Competition Council was necessary in order to implement this transaction.
Lietuvos Rytas

Residents of rural areas are encouraged to start business
Residents of rural areas who have farms are encouraged to think about alternative activity which is creation and development of business in a country. Applications for support according to the means of Lithuanian country development in 2007-2013 Support For Business Creation And Development are accepted from the beginning of September; a sum of support asked is bigger than LTL 150,000. A farmer can ask for support in order to establish a very small company or to develop activity of present company. The article further presents the details of request of this support.
Respublika, Lietuvos Zinios

Sales are increasing
Nine-month revenues of Lithuania's state-run oil product terminal operator Klaipedos Nafta (Klaipeda Oil), based on preliminary estimations, shrank by 6.8 percent, to LTL 83.7 million. The company received LTL 8.9 million income in September, which is by 24 percent more than last September. In September alone, the terminal handled 625,700 tons of petroleum products, up 18 percent from the year-earlier figure. However, the company handled 5.54 million tons of oil products in nine months of this year, which is by 10.6 percent less than during the same period last year.
Verslo Zinios

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