Investment company BaltCap, which has been picked as the concessionaire to build and run the National Stadium in Vilnius, has confirmed that it is looking for an outside investor for the project, the business daily Verslo Žinios has reported. It is not yet clear if the investor would take over all or part of the project.
Works at the construction site have been halted since late last year, with the company saying that amid rising prices it wants to renegotiate the terms with Vilnius Municipality. It seeks to have its agreed construction costs indexed to inflation.
Moreover, BaltCap has been embroiled in an embezzlement scandal, with one of its partners having allegedly gambled away 16 million euros of investor funds. BaltCap insists this has no bearing on the National Stadium project.
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Simonas Gustainis, managing partner of BaltCap, has confirmed to Verslo Žinios that the company’s position is that the project “could continue to be built and developed by other people”.
“As BaltCap, we feel responsible for the stadium, but we also have a duty to ourselves and to our shareholders and to the continued success of the company, so we believe that the National Stadium could continue to be built and developed by other people,” said Gustainis.
“We will, as before, make every effort to make the project happen, and to do that it is necessary to find a consensus with the sponsors in the municipality and the Ministry [of Education, Science and Sport],” he added.
According to Verslo Žinios, BaltCap has approached at least two investors about investing in the stadium project, Gustainis had not named them.
Education Minister Gintautas Jakštas told BNS on Wednesday that he did not know anything about BaltCap’s possibly wanting to withdraw from the project: “I can’t say much, but if it happens, we will talk to Vilnius Municipality, they are the main partners of the project. We will talk about how they see the situation, maybe they have a plan in place.”
The project started to stall after it became clear that it had become significantly more expensive and BaltCap asked the Municipality to index the construction cost. The Fund has repeatedly assured that Šarūnas Stepukonis, a former partner of BaltCap Infrastructure Fund, who is suspected of having embezzled millions of euros from the Fund and gambled the money in casinos, did not cause any damage to the company implementing the stadium project, Vilnius Multifunctional Complex.
However, according to Verslo Žinios, the situation has been identified by banks as a serious obstacle to obtaining funding.
Not commercially viable without indexing costs
In an interview published by Verslo Žinios on Thursday, Gustainis has argued that the National Stadium project is commercially viable only if Vilnius Municipality agrees to index the construction costs.
“The central thing that matters is whether this project has a commercial basis. The commercial basis is indexation. As long as there is no indexation, you can deal with Stepukonis, Jonas, Petras and whoever else you want to deal with and you still won’t get financing,” Gustainis said.
According to him, there is a bank in Lithuania that could provide a loan of around 100 million euros for the project, but he did not want to name it.
“This project is well prepared to be suitable for bank financing. What we are proposing to the municipality now, with the indexation and other changes, makes the project even more acceptable. There are preconditions to get bank financing from banks, but on condition that the indexation is there,” said Gustainis.
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