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Due to bankruptcy risk, "Liepajas metalurgs" will temporarily cease payments to feed-in tariff system

Phot: Evija Trifanova/LETA.
 RIGA, Jan 22 - Last week, the board of joint-stock metallurgical company "Liepajas metalurgs" decided to temporarily cease payments to joint-stock power utility company "Latvenergo's" feed-in tariff system, which acts as a support mechanism for electricity manufacturers, the company's board chairman Valerijs Terentjevs said during a Saeima Economic, Agricultural, Environmental and Regional Policy Committee meeting today.

"I understand that this is an unfortunate step on our part, but we do not have any choice," Terentjevs said.

"Liepajas metalurgs" chief economist Benita Imbovica admitted that the increasing feed-in tariff system payments are truly leading the company towards bankruptcy, thus it has been decided to pay suppliers instead of "Latvenergo". She added that another problem has arisen - banks are not extending lines of credit.

Describing the substantial payments made to the feed-in tariff system, Terentjevs informed that from 2008 to 2012, the company has paid a total of LVL 10.9 million, but in 2013 this payment alone will be over LVL 9 million. "You must agree, this increase is not normal," he said.

Terentjevs added that due to the feed-in tariff system payments, "Liepajas metalurgs" has not been able to increase salaries for employees, and that employees could be forced to leave the country to find other work.

The company has made the decision not to make any more payments into the feed-in tariff system until this matter has been solved.

As reported, "Liepajas metalurgs" achieved LVL 253.9 million in consolidated turnover in the first nine months of 2012, LVL 83.9 million more than in the respective period in 2011, according to the company's financial report submitted to "NASDAQ OMX Riga" this past November.

The company's consolidated profit amounted to LVL 1.4 million in January-September 2012, LVL 1.1 million less than in January-September 2011.

"Liepajas metalurgs" parent company operated with LVL 241.1 million in net turnover in the first nine months of 2012, LVL 81.3 million more than in the same period in 2011.

"Liepajas metalurgs" parent company also earned LVL 134,250 in net profit in January-September 2012, LVL 2.25 million less than in January-September 2011.
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