EU – Baltic States, Financial Services, Legislation, Lithuania, Port, Railways, Transport

"We signed yesterday an agreement with SEB Bankas. We will provide 1.2 million euros to the company, including the 150,000 euros that LG provided last week. We will contribute 40% of the total amount and SEB Bankas will contribute 60%. The money will be used solely for meeting the ships' vital needs," Stasys Dailydka told BNS on Friday.

"SEB's aim is to rescue the ships (from being auctioned off) and our aim is to ensure that the ships continue to function and that the seamen are not held hostage. This is the cheapest option to end the process," he added.

According to the CEO of the state railway company, which in late September took over a 56.66% stake in LJL from the Transport Ministry, the agreement with SEB Bankas does not mean that LJL will not go bankrupt. The shipping company is likely to file for bankruptcy in the near future.

Sigitas Dobilinskas, CEO of LJL, would not comment to BNS either on the outcome of the talks with SEB or on his further steps.

Dailydka said that rescuing LJL from bankruptcy would require huge money, noting that the marine shipping business was not going through its best times.

Two out of LJL's five ships are currently under arrest in foreign ports over debts: the Voruta in the port of Bata, in Equatorial Guinea, and the Raguva in Ceuta, a Spanish port in Northern Africa.

The Romuva is not far from Crete and the remaining two ships – the Venta and the Deltuva –- are in Klaipeda.

All the ships, except the Venta, have been pledged to SEB Bankas as collateral for loans.

The CEO of LJL last week asked a court to open bankruptcy proceedings, for the second time in recent months, but he withdrew his petition a day later.

SEB Bankas, which had lent LJL around 15 million euros for the acquisition of ships, last July provided a short-term loan of 650,000 US dollars (EUR 580,000) to financially-troubled company. Lietuvos Gelezinkeliai lent it another 2.8 million euros in August.