Latvian cosmetics firm Dzintars faces insolvency claim

The Riga Pardaugava Court will on November 5 begin reviewing insolvency administrator Mareks Diks' insolvency claim against the cosmetics producer Dzintars, the LETA newswire reported October 22.

The court's spokeswoman Viktorija Mezance said that Dzintars' legal protection case had been at the court since October 2016. An insolvency claim was received on October 21 this year.

Diks told LETA that alterations to the legal protection process prepared by Dzintars had not been approved by the company's creditors, hence the insolvency claim.

Dzintars' board member Dagnija Maike told LETA that the company's creditors had refused to wait until the end of the year, when the company was planning to sell its production facility and then settle its obligations to creditors.

"The company does not need the old Soviet-era production buildings, so the plan provided for selling them. One of the prospective buyers planned to arrive only in November, and the sale process would take about three months, but creditors didn't want to wait," said Maike.

Maike said that Dzintars cosmetics production business could be carried out at much smaller premises or a new, compact plant could be built.

"In any case, Dzintars will not disappear because the brand, the trademarks and all patents as intangible property belongs to the company's true beneficiary, Ilja Gercikovs," said Maike.

Dzintars (meaning 'amber' in Latvan) is one of the country's best-known brands, and claims to trace its roots back to 1849 when the Heinrich Adolf Briger soap and perfumery factory was founded in Riga, producing soap, candles, perfumery and Eau de Cologne from ready-made compositions from France.

It existed as a popular brand name even through the period of Soviet occupation and state ownership, and in 1991 was reconstituted as a joint stock company. In an interesting aside it is the only enterprise whose coat of arms is registered by the State Heraldry Commission. 

Latvian Radio contacted Dagnija Maike, a member of the board of Dzintars who said that cost-cutting measures had already taken place in an effort to clear debts of around 11 million euros and that it was hoped that the possible sale of its current manufacturing facility might raise about the same amount so that debts, including a hefty tax debt, could be paid off.

The company had an unnamed foreign investor interested in backing production at a new, smaller plant, Maiki said, though she could not give any details.

 

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