The Public JSC „Latvijas kuģniecība” (LSC) Group’s company „Latmar Holdings Corporation“, which also owns almost 700 000 shares of the LSC shareholder JSC „Ventspils nafta” (VN), asks to express distrust to the VN Management Board, finding its operation as unprofessional and unethical. Within the term prescribed by law “Latmar” has sent a respective letter to VN with a request to include the issue on expression of distrust in agenda of the nearest VN shareholders meeting on 11 November 2010. „Latmar” also requests to include in agenda of the VN shareholders meeting the issue on recalling of the VN Supervisory Council, holding it jointly responsible for the malicious activities of the VN Management Board.

 

„Latmar” is of the opinion that work of the VN Management Board in its present composition is dangerous and does not comply with interests of the VN shareholders. „Latmar” bases its opinion on incidents related to the LSC subsidiary „LASCO Investment” Ltd, for the solvency and announcement of extra-judicial legal defence of which inactivity and ignorance of the actual market situation are to be blamed, thus endangering interests of all LSC and VN shareholders and reducing the value of their investments. Operation and existence of „LASCO Investment” Ltd during the critical real estate market conditions is seriously endangered by provisions of the sale-purchase transaction of several real estate objects that in 2008 was concluded with the LSC shareholder JSC „Ventspils nafta” and that no longer in any way comply with the current market situation, and, as LSC has already several times pointed out, should be reviewed in order to ensure existence and development of the company and further execution of liabilities for the benefit of all LSC and VN shareholders. Transaction sum exceeds LVL 80 million, the largest part of which „LASCO Investment” has already paid to VN allowing the VN shareholders to receive dividends in amount of EUR 50 million at the end of 2009.    

 

To the repeated „LASCO Investment” Ltd requests and proposals to find a solution that would be beneficial and objective to all parties and would guarantee operation of the company in long term and would efficiently eliminate its liquidity problems, JSC „Ventspils nafta” has answered only with an invitation to prolong the transaction term until the end of 2010. Such an offer of extension cannot in any way be considered as a suitable proposal for prevention of the company’s insolvency and does not solve the current difficult economical situation of „LASCO Investment” Ltd.

 

According to the opinion of „Latmar” activities of VN Management Board are indicative of short term development plans that cannot be compatible with the VN shareholders aim to gain profit in the long term. “It is obvious that VN has actually paid in dividends to its shareholders the resources from “LASCO Investment” Ltd that should have been invested in the commercial activity. Thus the commercial activity of „LASCO Investment” Ltd has been substantially burdened, since in the result of the mentioned transaction „LASCO Investment” Ltd catastrophically lacks current assets both for the every-day business, and settlement of long term liabilities,” pointed out „Latmar”.

 

Recognition of the activities of VN as malicious would be a sufficient reason for each shareholder of LSC to address a claim against VN about recovery of the already existing and the coming losses that have been caused and possibly will be caused due to limited solvency of the LSC subsidiary company „LASCO Investment”. Since any claim for indemnification of losses reduces the income of VN, as well as dividends to be paid to its shareholders, as well as „Latmar”, it is a certain proof that members of the VN Management Board cannot anticipate the possible negative consequences of their decisions, to assess the baneful influence of these consequences on further events and to evaluate, whether the planned benefit is compatible with the possible high losses.  

 

„Latmar” requests that the VN Supervisory Council is commissioned to recall the VN Management Board, to appoint a new Management Board and to bind it to restructure the transaction by reduction of the purchase price at the amount of remaining purchase sum.

 

 

 

Additional information:

Ģirts Apsītis

Adviser of the Chairman of the Management Board

Latvian Shipping Company

Phone: +371 67020126

E-mail : ir@lscgroup.lv