VILNIUS — The finances of Lithuania’s state-run postal service Lietuvos Paštas are dipped so far in the red that transport ministry is preparing an emergency stabilization plan to keep creditors at bay.

The company lost 36 million litai (€10.4 million) in 2009 and 28.5 million (€8.2 million) the previous year. The ministry points to years of poor management as the culprit of the massive losses.

“It appears that the company’s financial situation, unfortunately, is far worse than previously declared to us by the management. After three months of reviewing the business records and the information provided to me, I assume to believe that the company was attempt to ensure that it could be privatized for 1 litas. Otherwise, I cannot explain the poor performance of the company even in economic boom times,” Minister of Transport and Communication Eligijus Masiulis said.

Corruption in the management of Lietuvos Paštas was in headlines earlier this year when Algirdas Balčiūnas, the Lietuvos Paštas maintenance director and head of the company’s public procurement commission was arrested with Dangis Savickas, the director the Transmitto transportation company who allegedly gave Balčiūnas a bribe of €10,200 to purchase

In reviewing Lietuvos Paštas’ past decisions, the ministry said it found the assets were sold or leased in an opaque manner, often at lower than market price and at completely unfavorable terms for the company. Meanwhile revenue from these and from operational activity were used only to take cover expenses instead of being invested in new technologies or other improvements.

The review of the company’s finances was undertaken by the recently-appointed Lietuvos Paštas Director General Andrius Urbonas. Urbonas took the post in October.

“The available findings suggest that the Lietuvos Paštas has been managed inefficiently. We see today that the company is in a very difficult financial situation and has serious long-standing problems in many areas of activity,” Urbonas said.

One measure already implemented is the reorganization of  72 loss-making rural post offices that incurred more than 2.3 million litai (€666,000) loss in 2008, an average 32,000 litai (€9,200) each.