October 10, 2011
Kekava seeks legal protection
Latvia's Kekava has applied for legal protection with the Riga District Court to regain positive cash flow and continue its operations, said the company's spokeswoman Ieva Sture.
Kekava board chairman Maris Adijans said that the legal protection process is a part of the company's restructuring plan. He said that Kekava has been working with losses for the past several years, accumulating a large debt; therefore, the company had troubles paying its suppliers. Under the influence of the global crisis, some company's customers were not able to pay for the production supplier, thus deteriorating the company's cash flow. To retain more than 600 workplaces for its employees and settle its liabilities and ensure the company's operations, the legal protection procedure is necessary.
Kekava board member Andris Sedmalis voiced confidence about success of the legal protection procedure. He added that according to the company's plan for the launch of the legal protection procedure, the company's solvency will be regained in two years. The company plans to increase revenues from sale, improve the work of the sales department and expand the range of customers, reduce power and heating expenses by implementing energy efficiency measures and decrease transport expenses.
Putnu Fabrika Kekava was founded in 1974. The controlling stake in Kekava is held by Kopfonds Company. Last year the company generated LVL20 million (US$37.899 million) in sales, down 7% from a year ago, while the company's losses rose by 55% to LVL1.826 million (US$3.462 million).