bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Ceturtdiena 27.07.2017 | Name days: Marta, Dita
LithuaniaLithuania

Is Lithuania to lose long-cherished status of maritime nation?

FaceBook
Twitter
Draugiem
print
(+1 rating, 1 votes)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RU

Ships leave (L) and enter at the Klaipeda port

Linas Jegelevičius for the BNN

Dry-bulk operator shipper Lithuanian Shipping Company (LSC) has been so deep in trouble that Lithuanian Prime Minister Algirdas Butkevičius was forced to cut short his vacation and rush to Vilnius to salvage the bankrupting company’s seamen stranded in ports scattered across the globe –in the United States, Portugal, Africa and Italy.

The ships have been grounded by local authorities following court rulings on the cash-strapped shipper’s incapacity to meet its obligations to numerous creditors. Some of the seamen were reportedly suffering from water and food shortage.

After several sittings this week, the head of Lithuanian Government has announced LSC, teetering on the brink of bankruptcy, will get a 3 million euro loan as early as next Monday.

«We hope that already next week- as early as Monday and Tuesday, the first debt payments will be done and ships will be released. Our aim is to set them free and allow them leave the ports after they offload their cargo,» Butkevičius told Lithuanian media Wednesday, July 29.

Experts believe, however, that LSC may need an extra 2 million euro for an immediate relief.

Three million euro loan comes at the expense of the state-owned company operating Lithuanian railways, «Lietuvos geležinkeliai», which after the Government-held meetings agreed to have its annual dividends cut this year by the amount of the loan.

Such arrangement might be in breach of EU law, some experts warned, however.

Following ship detention, Lithuanian President Dalia Grybauskaitė, exasperated, has called on resignation of Rimantas Sinkevičius, the Transport Minister, who she said is «first of all» responsible for the plight of the Lithuanian maritime company.

The head-of-state also lashed out at his predecessors, including the incumbent PM, who held the ministerial office during 2006-2008, saying they were «amassing» problems in Lithuanian Shipping Company.

The dry-bulk shipper has been staving off 11 million euro debt, which is part of a huge loan the company received from SEB Bank back in 2002 for acquisition of new ships.

LSC has to pay bank the debt it by the end of the summer.

LSC expansion plans were thwarted by the global downturn in 2008-2010, which saw sea cargo shipment prices nose-diving.

The shipper had had 11 fishing vessels during better times, but now operates only five. The loan coupled with scathing interest rates and the bank’s reluctance to re-negotiate the loan terms pushes the insolvent maritime company into abyss. Around 230 employees are said to be on the payroll in LSC.

The embattled company has already sought help from the Government last April, asking it to allot 11 million euro, but the authorities refused to extend a helping hand.

With the debts for creditors and local ports piling, the shipper saw all five ships apprehended in May. «Romuva» was detained in Italy, «Voruta» –in Portugal, «Raguva»- in Senegal, «Venta»- in the United States and «Deltuva»- in Poland.

Following Minister Rimantas Sinkevičius’ meeting with the President in mid -July, the Ministry announced LSC will be put through bankruptcy proceedings.

However, PM Butkevičius stepped in abruptly, saying that an emergency 30 million loan from SEB Bank will be given to LSC. It has allowed LSC to terminate bankruptcy proceedings.

«If we would not have saved the company today, we would have incurred tremendous losses and the ships would have to be sold at a very low price,» Butkevičius was quoted as saying. «If we would not have saved the company today, we would have incurred tremendous losses and the ships would have to be sold at a very low price…I think confidence in Lithuania’s maritime shipping would have decreased substantially as well. Of course we have to take care of seamen who have not received wages for several months, and this is a state enterprise.»

The prime minister inclined the loan of 3 million euro, to be guaranteed by Lithuanian Railways, will enable LSC to continue its activities until a plan for the company’s future is prepared, suggesting that its privatization is a possibility.

The PM expressed confidence the company will bring profit once a plan to continue operations was put in place. He did not elaborate on that, however.

Meanwhile, Petras Bekėža, the chairman of the Lithuanian Seafarer Union, told BNN he fears the demise of the Lithuanian Shipping Company will erase Lithuania’s name from the map of maritime nations.

He also called on the stranded seafarers not to abandon the hold-up ships and not come back home as it could make it difficult to get the long-overdue pay in the future.

Believing the accounts some of the seafarers’ relatives, the situation the seamen have ended up being in is quite desperate.

Sonata Lapinskienė, daughter of «Raguva» shipmaster’s second-hand Juozas Bakanaukas, told «Vakarų Ekspresas», a newspaper, her father along the other men and a female cook, the only woman on board, had suffered from the disconnection of air-conditioning. Besides, the food had ben rationed.

«They switched of AC in order to save the fuel. Fortunately, it has been turned on already,» she told.

According to her, the crew’s passports were taken away, so with no money in the pockets, they could not leave the ship.

LSC reportedly owes over 1.5 million euro in wages for around 100 seamen. The total of LSC debts is put at roughly 20 million euro.

Ref: 020/111.111.111.2653


Leave a reply

Farmers Saeima: beef industry in Latvia is not sufficiently developed

Farmers Saeima believes Latvia’s beef industry is not sufficiently developed, and existing farms have not sufficiently stabilized – many farms have major debt. Because of that any kind of support for the industry is welcome.

Puce: Latvia should ratify Istanbul Convention without reservations

For Latvia’s Development political party has turned to Welfare Ministry with a request to ratify Istanbul Convention without any corrections as soon as possible, BNN was informed by the party’s representatives.

More than half of Latvian businessmen work on weekend; study shows

Businessmen normally spend eight hours and five minutes on work every day. More than 58% of Latvian businessmen also work on weekends, according to data from the latest Citadele Index study.

Farmers: crop yield this year will be positive thanks to weather

In Zemgale, crop harvest began a week ago. Harvest of winter crops is almost over. Harvests elsewhere in Latvia will commence no sooner than August, farmers say.

Murniece offers UGF to consider replacing Duklavs

«The policy is that, considering Duklavs’ involvement in Ridzene talks, the Union of Greens and Farmers should consider ways of resolving the situation,» says Saeima speaker Inara Murniece.

Chinese-Russian navy drill takes place in Baltic Sea

Russian and Chinese navies have launched their first joint military drill in the Baltic Sea raising concern to NATO member states Estonia, Latvia, Lithuania and Poland, cautious of Russia's aggressive actions in Ukraine.

Tax loss forecast by Estonian food producers dismissed by Finance Minister

Estonian Finance Minister Toomas Tõniste has rejected the grim forecast published by the Estonian Food Industry Association this week that the state budget would lose 170 million euros in tax revenue in 2018 due to excise tax hikes.

Antane: excise tax for diesel fuel should be reduced, not increased

«Unfortunately, when making the decision to increase excise tax rate for diesel fuel, the government did not consider all possible risks this decision could bring to the transport and logistics industry and the country’s economy as a whole,» BNN was told by President of Baltic Association – Transport and Logistics Inga Antane.

Association: rapid increase of excise tax would cause dramatic rise of smuggling activity

National Association for Tobacco Product Manufacturers is confused about Finance Ministry’s submitted proposals for tax reform that provide for raising excise tax on cigarettes by 11% instead of previously planned 5.5%.

UK plans to ban petrol and diesel vehicles

In an attempt to curb air pollution the UK plans to set the goal to ban from 2040 new diesel and petrol engine cars and vans.

Members of Saeima delegated to the investigative committee in charge of Oligarch case

Andrejs Judins from Unity, Martins Sics from Latvian Association of Regions, Igors Pimetovs from Harmnony, Ritvars Jansons from VL-TB/LNNK, Inguna Sudraba from To Latvia from the Heart and Ainars Mezulis from the Union of Greens and Farmers have been delegated to the parliamentary committee for the investigation of Oligarch case.

U.S. legislators back additional sanctions on Russia

The House of Representatives of the U.S. Congress has adopted imposing additional sanctions on Russia, North Korea and Iran, even though U.S. President Donald Trump has opposed fresh sanctions on Russia.

Government allows Bite Lietuva to become the owner of TV3, LNT and Star FM

On Tuesday, 25 July, the Cabinet of Ministers permitted Lithuanian company UAB BITE Lietuva to acquire decisive influence in Latvian media companies TV 3 Latvia, LNT and Star FM.

Latvia put on 34th place in global pension index

Latvia is on the 34th place of Natixis Global Asset Management global pension index. It is two places lower than last year, according to the index report for 2017.

Experts predict nearly half of beer consumed in Estonia will be procured in Latvia

Estimates of Estonian alcohol producers and retail traders show that nearly half of all beer and one-third of vodka that will be consumed in the country next year will be procured in Latvia. According to experts, this way Estonia will lose up to EUR 170 million in tax revenue, Postimees reports.

Latvia had the sixth smallest new vehicles registration index in Europe

Compared with the same period of 2016, Latvia has had the sixth lowest registration index for new commercial vehicles in Europe in January-June period, according to data published by European Automobile Manufacturers Association.

LAR proposes reducing micro-enterprise tax to 12%

Latvian Association of Regions proposes establishing micro-enterprise tax rate at 12% instead of 15%, as well as state that calendar year turnover for micro-enterprises is not to be reduced to EUR 40,000, as it is proposed by the government, but to be kept at the current restriction – under EUR 100,000.

Court dismisses Krums from the last of his supervised insolvency process

On Monday, 24 July, Riga Pardaugava Court dismissed the currently arrested insolvency administrator Ilmars Krums from the last one of the insolvency processes currently under his supervision, as confirmed by Insolvency Administration’s representative.

49 «quota refugees» away from Estonia for over 90 days

49 people of the refugees accepted by Estonia as part of the European Union's refugee relocation programme have exceeded the 90-day period of being allowed be away from the country.

Opinion: EU agricultural policy is not equal to all member states

Latvian Association of Agricultural Cooperatives organized a meeting with Agriculture Ministry’s and State Plant Protection Service’s specialists to discuss and search for solutions for opportunities to sow fermented summer rapeseed.

In pictures: Corsica hit by widespread forest fires

Fire-fighters in the French Mediterranean island of Corsica continued on the night to July 25 to battle forest fires covering an area of some 900 hectares.

Can Latvia expect a more rapid rise of excise tax for alcohol and cigarettes?

Finance Ministry has plans to raise excise tax on alcoholic beverages and cigarettes even more rapidly, according to proposals prepared by the ministry to the Excise Tax Law. These proposals have been submitted to the Saeima for approval in the final reading.

LCCI: e-health system will help reduce the number of dishonest patients

«Healthcare Ministry has to secure full integration of e-health system and form a policy for healthcare specialists that is aimed at returning labourers back to work as soon as possible, not issuing countless sick leave certificates,» as noted by representatives of Latvian Chamber for Commerce and Industry.

Swedish government admits «disastrous» data leak

The government of Sweden has stated that one of its agencies has committed a massive leak of sensitive data in 2015, when it organised an information technology outsourcing procedure.

Vucans: there are plenty of proposals for tax reform laws

Around 350 proposals have been received by the Latvian parliament in relation to tax reform laws. Last week, the Saeima supported tax reform laws in the first reading. This week, on the other hand, it is planned to review them in the final reading.