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Court launches legal protection proceedings for Liepajas osta LM

BC, Riga, 28.05.2014.Print version
Liepaja Court yesterday launched legal protection proceedings for Liepaja Special Economic Zone company Liepajas osta LM, informs LETA/Nozare.lv.

"I had said several times that Liepajas osta LM was experiencing serious difficulties with honoring its debt liabilities following the insolvency of Liepajas metalurgs. The legal protection proceedings are necessary to fully restructure Liepajas osta LM and come to agreement with the creditors. The legal protection proceedings give the creditors an opportunity to coordinate restructuring of the company and reach agreement on the further process of debt repayments by the company," said Haralds Velmers, the insolvency administrator for the insolvent joint-stock metallurgical company Liepajas metalurgs.

 

Liepajas osta LM shares will be available for purchase in the near future, added Velmers.

 

"It is important for Liepajas osta LM to find a new owner as soon as possible," said Velmers adding that the new owner would hold 91.6 percent of the company's shares.

 

As reported, on April 29 Velmers notified Liepajas metalurgs creditors that Liepajas osta LM would not be sold at auction.

 

A notice about the sale of Liepajas osta LM shares will be printed in at least one business newspaper and portal in Latvia, and bids will be accepted for one month after that, said Velmers.

 

Liepajas osta LM and Liepajas metalurgs are two different companies, and selling and restructuring the former requires a different and complex approach, said Velmers. This will help solve problems regarding Liepajas osta LM future operations as well as the Liepajas metalurgs sales process. Separate sale of Liepajas osta LM will make it easier to sell the company and therefore help it solve its critical financial problems. On the other hand, if Liepajas metalurgs was sold along with Liepajas osta LM's major financial liabilities, this could have a negative effect on the company's price, explained Velmers.

 

"In taking the decision on selling Liepajas osta LM, I acted as not just a seller but also as a representative of Liepajas osta LM shareholders to which the future of the company is important," notes Velmers, explaining that the new sales strategy for Liepajas osta LM will help find the best buyer. Also, it cannot be rule out that some of the investors may want to buy both Liepajas osta LM as well as "Liepjas metalurgs", added Velmers.

 

If bids for buying Liepajas osta LM do not meet the interests of the company or of Liepajas metalurgs, the company will be sold at auction pursuant to the Civil Procedure Law and Insolvency Law.

In the meantime, Liepajas metalurgs will continue to have access to port services thanks to the subsidiary of the company, 50. piestatne. It is currently planned that "50. piestatne" will be sold together with Liepajas metalurgs.

 

Earlier last month, Velmers said it was possible that Liepajas osta LM, a subsidiary of the insolvent metallurgical company Liepajas metalurgs, could request legal protection proceedings to be started so the company could sort out its financial problems.

 

This may be necessary if Liepajas osta LM has to pay into the state budget a total of EUR 28,375,874.90 – the amount of value added tax not yet paid by the company plus late payment penalties.

 

Liepajas osta LM is the largest stevedoring company in Liepaja. The company's turnover decreased significantly last year, by 45 percent, after its parent company Liepajas metalurgs was ruled insolvent.






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