EMEA News
Lithuanian Shipping Company Initiates Bankruptcy Proceedings - Then Withdraws Them
Troubled dry-bulk operator shipper Lithuanian Shipping Company (LSC) looked to have finally succumb to bankruptcy following an official announcement Thursday, after denying it had applied for insolvency earlier in the month, only to withdraw the application shortly afterwards.
Algirdas Butkevičius, Lithuania's Prime Minister, Friday said that LSC will now receive a €30 million ($32.92 million) loan from AB SEB bankas (SEB), according to local media reports.
"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," said Butkevičius.
"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 said that the loan will be guaranteed by Lithuanian Railways, and that LSC will be able to continue its activities once a plan for the company's future is prepared, noting that privatisation is a possibility.
Butkevičius also noted that LSC's financial obligations are considerable and measures have been taken to ensure that the company's vessels continue sailing.
The prime minister also added that he is confident the company will bring profit once a plan to continue operations was put in place.
Last week Ship & Bunker reported LSC was on the "brink of collapse" but still had financing in place to pay for bunkers and other essentials.
