Observer "Lietuva"
WEEK 52nd

Monday, 22nd of December

Mazeikiu Nafta acquired Mazeikiai power plant, preliminary data
A Lithuanian oil refinery Mazeikiu Nafta, controlled by the Russian oil concern Yukos, has won the tender for privatization of Mazeikiai thermal power plant. However, this information has been confirmed neither by the State Property Fund nor Mazeikiu Nafta yet.
Relying on preliminary data, Mazeikiu Nafta offered LTL 17.8 million for the thermal power plant, while another participant of the tender, a Czech company Falkon Capital offered LTL 18 million price.
The State Security Department named Falkon Capital as a company threatening national security of the country.
Mazeikiai power plant incurred LTL 1.558 million loss in nine months of this year.
(Lietuvos Zinios)

10-month retail turnover grows
Turnover of retail chains, companies supplying engine vehicles and their maintenance as well as fuel retailers amounted to LTL 14.335 billion in ten months of this year, a 12.8 percent rise year-on-year, the Statistics Department reports.
Relying on the preliminary data, turnover of big retail food chains increased by 18 percent, while the trade volume of average-sized companies declined by 14.8 percent over the given period.
(Verslo Zinios)

Countryside tourism sectors grows
The Lithuanian Rural Tourism Association forecasts that rural farmsteads for tourists will receive by 33 percent more holidaymakers this year. 148,000 people visited Lithuanian rural homesteads in 11 months of this year, a 37 percent rise year-on-year.
The Association has calculated that 10,600 people visited homesteads in countryside in November 2003, or 37.7 percent more than during a relevant period last year.
There are 680 homesteads for tourists in countryside in Lithuania at the moment.
(Verslo Zinios)

Tuesday, 23rd of December

Vilniaus Bankas boosts net profit
Vilniaus Bankas, the largest national commercial bank in terms of assets, estimates that net profits for 2003 will be bigger than last year's, the financial institution's President Julius Niedvaras told reporters on Monday.
The Lithuanian financial group's audited net profit last year stood at LTL 126.5 million, based on international accounting standards. The figure represented the commercial bank's best financial result ever.
Vilniaus Bankas' preliminary data for the first three quarters of this year indicate a pre-audit net profit of LTL 85.3 million, LTL 11.6 million less than a year ago. Nine-month profits reportedly thinned because of a 1 percent curtailed interest margin. The reduction in the margin was due to strong competition and a money surplus in the banking sector.
(Kauno Diena, Verslo Zinios)

Syndicate of banks will issue EUR 120 loan to VP Market
Vilniaus Bankas has confirmed that it participates in a syndicate of local banks which will provide financing for the acquisition of Vakaru Skirstomieji Tinklai (VST), the western part of the national power grid.
According to information available to BNS, the syndicated loan of EUR 120 million, the amount of which can still be increased, will be extended to owners of the retail group VP Market on Tuesday.
Hansabankas is the lead-manager of the syndicated loan. Apart from Vilniaus Bankas, the loan syndicate also comprises the Vilnius branch of Germany's Vereins-und Westbank, Nordea Bank Lietuva and Sampo.
The owners of VP Market, the largest retailer in the Baltic countries, are to pay LTL 539.845 million for a majority interest in VST. Total investment in the acquisition of the power distribution company may reach LTL 701.1 million following a buyout of minority shareholders. The buyers have also pledged to invest at least LTL 420 million in VST over a period of five years.
(Kauno Diena)

Lithuanian computer manufacturers threaten to move production to Latvia
The Lithuanian association of ITT companies, Infobalt, has said the government's decision to introduce "a blank tape" tax on computer hard drives imported into this country and not to apply this levy on personal computers assembled abroad discriminates against local computer producers.
"That is why we will seriously consider moving our production to Latvia," Arunas Bartusevicius, CEO of Sonex Group, Lithuania's largest computer producer, said in a news conference on Monday.
Last August, the government decided to impose a tax amounting to 6 percent of the wholesale price on blank audio and video tapes, CDs and other storage media, including hard drives, starting January 1, 2004. The tax revenue will go into a special royalty pool that compensates copyright owners.
Vytautas Stunzenas, director of GNT Lietuva, Lithuania's leading computer hardware wholesaler, said prices for personal computers could rise by up to LTL 20 due to the tax on hard drives. Lietuvos Zinios, (Verslo Zinios)

Wednesday, 24th of December

Rimi boosts competition in retail trade sector
UAB Rimi Lietuva boosts competition among the biggest trade centres: a real estate company UAB Hanner starts building Rimi Hypermarket. So far, UAB VP Market has been the only company to have hyper markets.
The agreement on the construction of the new centre was signed on Tuesday, December 23. It will be built in Kaunas Savanoriai prospect. There will be some 25 trade centres in the new hyper-market. RIMI Hypermarket will be located on the ground floor (5,000 square metre of trading area) and will create 200 new working places. Investments in the hypermarket will amount to LTL 40 million.
There are four retail food hypermarkets in Kaunas, all of them are controlled by VP Market. The company plans to complete building Akropolis in Kaunas in 2005.
UAB Baltic Shopping Centres (BSC) hopes to begin constructing a big trade centre in Kaunas suburb Vytenai in spring.
(Verslo Zinios, Respublika, Kauno Diena, Lietuvos Rytas)

Last year was successful for the country in terms of economy growth
Economy's growth last year has surpassed all expectations. However, experts warn that the government's behaviour based on optimism might be the start of the decline next year.
Positive macro-economic tendencies that became visible three years ago are continuing and growing stronger: GDP grows at an increasing pace, the deficit of the current account has shrunk and everybody has forgotten about the forecasted 0.9 percent deflation.
Lithuania ranks second among the future EU member countries in terms of meeting the commitments. Three most important international credit rating agencies have confirmed the reducing risk of state's crediting, two of them have raised Lithuania's rating twice over the year.
Due to such impressive results, the most influential international institutions evaluated the country's progress positively. They called Lithuania the "rising star of the region" and the "Baltic tiger".

Heads of Rokiskio Suris
The current heads and shareholders of the Lithuania's largest milk processing company Rokiskio Suris (RS) do not plan to sell their shares.
RS director and one of the main shareholders Antanas Trumpa, who has a 22.9 percent stake in Pieno Pramones Investiciju Valdymas (Milk Industry Investment Management), and Survesta company have signed an agreement, following which the two parties agreed to coordinate decisions on the most important issues of the milk company's management and to acquire a control block of RS shares.
Pieno Pramones Investiciju Valdymas has been established exceptionally for the purchase of RS shares.
Trumpa reported that an official bid for the remaining shares will be placed as soon as the control block of RS shares is purchased.
(Lietuvos Zinios)

Saturday, 27th of December

Alita to be sold to its executives
A consortium set up by senior executives of Alita is to pay LTL 58.05 million for a majority stake in one of the country's leading alcoholic beverage producers, with a deal expected to be signed in early January.
The Lithuanian Cabinet at last endorsed the draft agreement on the sale and acquisition of an 83.77 percent stake in Alita on Wednesday, the government's press office said. The government has delayed giving the go-ahead for the deal for a month.
The consortium is comprised of Vytautas Junevicius, managing director of Alita, Darius Vezelis, marketing director, CFO Vilmantas Peciura and Arvydas Jonas Stankevicius, production director, as well as Invinus, a new company set up by Alita's executives.
(Lietuvos Rytas)

Authorities do not want to sell Rytu Skirstomieji Tinklai to Eesti Energia
The verdict concerning the further privatisation of Ryt_ Skirstomieji Tinklai, Lithuania's eastern power transmission operator, is to be announced next year.
After the withdrawal of German-owned E. ON Energie from the RST sell-off, the Estonian government-owned firm Eesti Energia remained as the only bidder. The Lithuanian side has however signalled its reluctance to sell the local power company to Eesti Energia.
The Lithuanian officials have also called into question the potential restructuring of the Estonian power utility.
According to informal sources, the authorities have already decided not to sell RST to Eesti Energia.
The potential Estonian buyer has reportedly offered over LTL 520 million for a 71 percent interest in RST.
(Lietuvos Rytas, Kauno Diena, Lietuvos Zinios)

Competition body allows MG Baltic to acquire LNK channel
Lithuania's Competition panel gave a green light to the MG Baltic concern to acquire Lithuania's commercial television channel LNK from Swedish Bonnier without the right to participate in management of the channel.
The regulators issued permission for MG Baltic Investment, a subsidiary of MG Baltic, to carry out certain concentration operations, settle the payment and take over 100 percent of LNK shares, owned by Bonnier Entertainment through Marieberg Media.
However, MG Baltic Investment will not be allowed to participate in operation of LNK until the resolution of Competition panel to issue a permit for concentration.
According to media reports, Bonnier, the current owner of LNK, should receive some LTL 60 million for 100 percent of shares in the commercial TV channel LNK with annual revenues of some LTL 50 million.

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