On Friday, 9 September, Riga City Court of Law decided to declare Rīgas mikroautobusu satiksme LLC (RMS). Routes previously serviced by the company will not longer be available.
The insolvency request was submitted to the court by the company. The court’s ruling is not subject to appeal.
Juris Mičerevskis is appointed as insolvency administrator.
At the end of June, the court initiated a legal protection procedure for RMS. The company was to submit a legal protection plan approved by creditors to the court by 29 August, but it was not done.
RMS representative Maija Lazdiņa said the drop in passenger numbers during Covid-19 pandemic had a significant impact on the company’s revenue stream. This is why in September 2020 RMS turned to municipal public transport company Rīgas satiksme LLC with a request to increase the subcontracted service price, as this is permitted by the contract.
No agreement was reached in the end.
In the middle of summer there was an agreement reached for a possible termination of the contract and take-over of routes. However, at the last moment Rīgas satiksme’s board made a different decision, which resulted in the fact that as of Friday, 9 September, the service is no longer available.
«This decision was made by the insolvency administrator,» said Lazdiņa.
She said that in two years since 2020, when RMS first turned to Rīgas satiksme with a request to increase the subcontracted service price, the company’s total losses have reached more than EUR 4.45 million.
The drop in passenger transports due to Covid-19 pandemic was 70%.
RMS believes the differences of opinions between the company and Rīgas satiksme in regards to other aspects of the contract do no justify inaction from the latter, which resulted in RMS going insolvent.
«In two years we have reached the conclusions that this was done intentionally and any arguments and problems with compliance with the contract were pulled in order to justify refusal to provide changes to the service price,» said RMS representative.
«After fuel costs reported in June, Rīgas satiksme did not consider them a good enough reason to admit the fuel price rise and influence of these costs, as well as the need to review RMS service price.»
Since May 2013, when the first RMS express buses first started coursing in Riga, the company has carried a total of 75.5 million passengers.
RMS board member Dace Aizupiete said that since 2013 the company has worked with 1 203 drivers. Some of them have been employees of the company from day one. Aizupiete thanked employees and passengers who used RMS services this whole time.
RMS was registered in 2013 with a base capital of EUR 1 million, according to information from Firmas.lv. The company is owned by B-Bus LLC, whose beneficial owner is Vitalijs Komars.
The company’s turnover in EUR 4.777 million in 2020, which is 3.2 times less than a year prior. The company also suffered losses of EUR 1.87 million as opposed to profits acquired in 2019.
Last year turnover continued going down – to EUR 3.68 million. The company’s losses reached EUR 1.80 million.