Kaleve Spa, in central Tallinn, says it needs the loan to refinance previous loans and to reduce risk resulting from coronavirus restrictions, at the same time reducing its monthly loan payments, the spa's director, Piret Betlem, wrote to culture minister Tõnis Lukas (Isamaa).

Work was done 2017-2019 to reconstruct the spa, largely with loan money, including a loan of close to €15 million from Swedbank at a 1.95 percent per annum rate of interest.

The company says its turnover fell practically to zero at the peak of the pandemic, and it has already taken advantage of an Unemployment Insurance Fund (Töötukassa) wage compensation scheme, reduced salaries by a third and made layoffs.

Other measures Kalev Spa has taken include asking for a half-year period of grace on repayments, postponed its tax arrears for two years, applied for support of €60,000 from Enterprise Estonia and for a loan of €1 million from state credit agency KredEx.

The company says that it may need to close its 50-meter swimming pool – the only one of its kind in northern Estonia – or raise entry prices without the latest loan request being granted.

Kalev Spa also noted in its letter that the facility has a national interest dimension, since personnel from the Estonian Defense Forces (EDF) and the Rescue Board (Päästeamet) make use of the pool, which has a depth up to 4.5 meters, for diving training and other activities.

"The outlook for the next few years does not correspond with the original business plan in connection with the forecast deteriorating loan conditions, not to mention the restrictions caused by COVID-19 and the lack of visits from foreign tourists," the statement read.

OÜ Kalevi Veekeskus, which operates Kalev Spa, is owned in equal parts by Jaan Manitski and the Kalev sports society (Eesti Spordiseltsile Kalev).

The company had already made a loss in 2019 of €440,000 from a turnover of €4.5 million. 

Last year, the company employed just over 100 people on an average salary of just over €1,200.

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