Hereby AS „Rīgas kuģu būvētava” (Company) informs that number of sworn bailiffs have commenced enforcement measures for the collection of debts related to outstanding debts against its creditors. The Company points out that currently it has difficulties in fulfilling of its obligations, but basically it arose due to lack of the working capital.

One of the main factors contributing to the current circumstances and the lack of working capital is situation in the financial sector of the Republic of Latvia. Unfortunately, in Europe and especially in Scandinavia, there is a great deal of disrespect for Latvia’s credit institutions – mainly with local capital. It was followed by a decision of the customers not to accept the guarantees issued by Latvian credit institutions as collateral, and as a result of the customers’ uncompleted investment portfolio the Company has lost multi–million euros worth orders in recent years. Consequently, the Company was forced to discontinue the provision of shipbuilding services which so far ensured the adequacy of working capital, particularly during the winter period, when ship repair services are not provided and the docks are staying idle.

Under the circumstances restructuring measures were carried out and as a result current monthly operating expenditure is considerably reduced – even by more than 60%, but such a reduction has been also achieved due to some unpopular measures, like terminating the employment relationship with the majority of the employees of the Company, unable to provide regular wage payment, and attracting more subcontractors for the provision of ship repair services.

As it was already mentioned before on May 28^th, 2018 the Riga City Vidzeme Urban District Court resolved to initiate the legal protection proceedings of the Company, what at the opinion of the Company was the right step to get out of the complex conditions that have arisen under the influence of various circumstances, and whose sole purpose was to preserve the Company’s activities, the work profile and to re–establish the situation, allowing to fulfil its obligations and to ensure further development of the Company, but application for legal protection proceedings of the Company, without even examining the merits, was rejected and case of legal protection proceedings was dismissed.

Unfortunately due to outstanding indebtedness sworn bailiffs, on the basis of enforcement documents, have commenced enforcement measures for the collection of debts related to the tax debt to the State budget, unpaid wages and liabilities towards the Company’s service providers.

As a result:

1. Sworn bailiff Evita Eistere with its location at Riga Regional Court District No.62 organizes the first auction of the real estate owned by the Company, located at Gāles iela 2, Riga, cadastre number 0100 613 0116. Real estate consist of wooden granules production building, where the initial price of the auction is set at EUR 369 000. The creditor is AS “Latvijas Gāze”, where the outstanding liabilities are in the amount of EUR 79 153,11;
2. Sworn bailiff Raimonds Mežiņš with its location at Riga Regional Court District No.78 organizes the first auction of the real estate owned by the Company, located at Augusta Dombrovska iela 5, Riga, cadastre number 0100 613 0107. Real estate consists of a former fire depo building, where the initial price of the auction is set at EUR 52 700. The creditors are former employees of the Company, where the outstanding liabilities are total in the amount of EUR 52 700;
3. Sworn bailiff Jānis Lazdāns with its location at Riga Regional Court District No.59 organizes the first auction of the 730 capital shares of SIA “Remars Granula”, unified registration number 54103022521, owned by the Company, where the initial price of the auction for all capital shares is set at EUR 20 440. The creditor is former employee of the Company, where the outstanding liabilities are in the amount of EUR 9 783,88.

The Company draws attention that auctions organized by the sworn bailiffs for the alienation of real estate or capital shares will not affect the economic activities of the Company, since the aforementioned buildings are rented out to the tenants and not being used in the daily economic activities of the Company. Moreover, in case of the successful development of the auction organized by the sworn bailiff Evita Eistere the Company will reduce its credit obligation towards the credit institution, as a mortgage on real estate has been registered in favour of a credit institution to ensure the fulfilment of the Company’s credit obligations. Similarly, the auction prices of real estate will not affect the Company’s financial statements and the total value of its assets, since the real estate values in the balance sheets in accordance with the Company’s accounting system data are below their initial auction prices – respectively (item No.1) at EUR 281 638,01 and (item No.2) at EUR 23 715,03. The Company additionally informs that according to the reports of the auditors on the financial statements of previous years, the Company protractedly has been trying to sell assets related to SIA “Remars Granula”, but unsuccessfully.

Also to speed up the fulfilment of the delayed financial obligations, attraction of additional funding from an alternative source has been considered, where the management of the Company has already turned to an individual private investors and negotiating possible cooperation principles for last several months that would be willing to invest the financial resources for the development of the Company’s economic activities, thus providing the working capital and stabilizing the Company’s current financial situation, as well as ensuring its successful economic activities in the future.

Neskatoties uz iepriekš minētajiem pasākumiem, Sabiedrība šobrīd turpina ikdienas saimniecisko darbību un ir apņēmības pilna, ka tā spēs atjaunot darbību, tādejādi nodrošinot Sabiedrības stabilitāti un konkurētspēju, kā arī saistību izpildi pret tās kreditoriem.

Notwithstanding to aforementioned measures the Company currently continues its daily economic activities and is determined to be able to re–establish its activities, thereby ensuring the stability and competitiveness of the Company, as well as the fulfilment of its obligations towards its creditors.

The Board of Directors of AS „ Rīgas kuģu būvētava”