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Latvian finance minister skeptical about state guarantees to DLRR train engine company

BC, Riga, 25.10.2016.Print version
Latvian Finance Minister Dana Reizniece-Ozola (Greens/Farmers) is skeptical about the possibility to grant state guarantees to Daugavpils Lokomotivju Remonta Rupnica (DLRR), the train engine repair group based in the southeastern Latvian city of Daugavpils, the minister said.

Reizniece-Ozola said that the company has the rights to request state support, but the government has to revise all possibilities before making the decision.


"There are many employees in DLRR, it is hard for the region to create new workplaces right now. This means additional emotional and moral responsibility for the government," the minister said, adding that the government has to evaluate all information on the case.

"I cannot promise anything, earlier experience with state support to companies has been negative. It should be revised whether state guarantee is the best support or a different solution should be found," the minister said.


She also informed that the company first has to turn to the Economics Ministry and provide all necessary information. The the Economics and Finance Ministries together will discuss the case.


Economics Minister Arvils Aseradens (Unity) also told LETA that before making the decision, all information has to be studied carefully. So far the ministry has not been contacted by the company.


As reported, DLRR has asked the government guarantees for provision of bank loan, the company said in its statement to the Nasdaq Riga stock exchange.


DLRR informed in a statement to the bourse about failure to reach an agreement with Swedbank regarding extension of credit agreements terminating this year and potential default of liabilities towards the bank. The refusal has been caused by the financial situation in the plant and the lack of confidence of the bank regarding increase of order volumes.

To save the company, 432 people or 45% of the total amount of employees have been dismissed since January 2015.


The difficult situation in relations between Russia and the EU led to sharp decrease of orders from the Russian market.


The largest shareholders DLRR are Estonia's Skinest Rail with 47.97% and Estonia's Spacecom (25.27%), which belongs to the Russian transport group Severstaltrans. DLRR is quoted on the Nasdaq Riga Secondary List.






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