Month: September 2023

---

The largest environmental resource management and recycling group in the Baltics, Eco Baltia AS, informs bondholders who are non-residents of Latvia about the procedure for applying reduced personal income tax (PIT) or exemption from PIT for coupon payments on bonds issued by the company.

Pursuant to the Law on Personal Income Tax (“PIT”), income related to interest income received by a non-resident of Latvia is taxed in Latvia. The tax rate is 20%. This means that a Latvian company paying interest to a non-resident individual is obliged to withhold PIT.

Latvian non-resident taxpayers may be subject to a reduced rate of personal income tax or even tax exemption based on the double tax treaty in force between Latvia and the signatory’s tax domicile.

If a non-resident of Latvia wishes to have the interest income paid on the Securities subject to the lowest possible rate of personal income tax at the time of coupon payment, the holder of the Securities must submit the original of the Resident Certificate for Tax Relief to Eco Baltia AS. It must be submitted for each calendar year separately.

If the standard rate of withholding tax has already been deducted at the place of income, it is possible to apply for a tax refund by submitting the original of the Resident’s Tax Refund Certificate to the Latvian Tax Administration. The PIT refund may be claimed starting from 1 March of the year following the calendar year of interest income receipt.

Full information on the possibility of obtaining a reduced rate or exemption from income tax can be found HERE>>

On 11 September, Jūlija Zandersone joined the management team of PET Baltija, the largest and fastest growing environmental resource management and recycling group in the Baltics, and will now be the Chairman of the Management Board and Head of the Recycling Sector of the Eco Baltia Group.

Māris Simanovičs, Chairman of the Management Board of Eco Baltia: “Over the past year and a half, PET Baltija has experienced both challenges and significant development. Even though the recycling sector faces not particularly benevolent conditions in global markets, the company continues to grow, expanding and strengthening its position in the Baltics and Northern Europe. Last year, PET Baltija achieved its best turnover ever, and has started Work on the construction of a new production facility in Olaine, Latvia. As the Eco Baltia Group continues to develop, investments will continue to be made in improving PET Baltija’s operations. However, it also requires a broader vision of the overall development of the industry, and we believe that the addition of professional management to the Board is an opportunity to plan PET Baltija’s growth with even greater capacity.”

Julia Zanderson’s role in the company will be to implement the objectives set by the shareholders, which include accelerating PET Baltija’s development into a regional market leader together with its subsidiary Tesil Fibers. Julia Zanderson has extensive experience in strategic business development management, business planning and customer relationship management. She spent more than ten years in senior positions at design and construction company Citrus Solutions, including five years as Chairman of the Board. Zandersone holds a Master’s degree in Economics from the Riga Technical University  and last year graduated from the London Business School’s Senior Executive Programme.

The changes in the Management Board of PET Baltija are aimed at accelerating the company’s development and investment projects. Therefore, already on 17 July, Kaspars Ezernieks joined the existing Management Board as a member of the Management Board and Executive Director, while Salvis Lapiņš, the previous Chairman of the Management Board of PET Baltija, performed his duties until 21 July this year.

INVL Baltic Sea Growth Fund, leading private equity fund in the Baltic States, together with its portfolio company Eco Baltia, the largest waste management and recycling group in the Baltics, agreed to acquire a 70 percent stake in the largest Polish PVC windows recycler Metal-Plast.

The transaction is expected to close in Q4 2023, subject to receiving permission from the Polish Office of Competition and Consumer Protection as well as fulfilling other conditions precedent.

Metal-Plast has about EUR 34 million in annual revenues and employs about 200 people. The company is located in Świebodzice in the Lower Silesia province of Poland. It has current annual recycling capacities of 29,000 tonnes. From an environmental reporting perspective, 1 ton of recycled PVC saves 2 tons of CO2 emissions.

As part of the transaction. Mr. Sebastian Fedorowicz, Founder at Metal-Plast, will retain a 30% stake in the business. He added:

“Following 30 years of successful operations, Metal-Plast has become the leader of the Polish PVC recycling market. This strategic partnership with Eco Baltia and INVL Baltic Sea Growth Fund will now enable the company to pursue further growth opportunities.”

Janis Aizbalts, Head of Eco Baltia’s Environmental Services division, commented:

“Eco Baltia continues to grow and expand, not only in the Baltics but also internationally and Metal-Plast fits our internationalisation strategy very well. We now plan to develop Metal-Plast’s recycling capacities by 1.5x to 45,000 tonnes in a year, furthering our contribution to the evolution of circular economies.”

Vytautas Plunksnis, Partner at INVL Baltic Sea Growth Fund and Chairman of the Eco Baltia Supervisory Board, added:

“Metal-Plast represents the 8th portfolio investment of INVL Baltic Sea Growth Fund. The circular economy remains one of our core investment pillars and we are delighted to again partner with one of the most successful portfolio companies to date in Eco Baltia and Mr. Fedorowicz to further drive Metal-Plast’s exciting growth journey.”

The company will continue to be led by current CEO Mr. Grzegorz Jasinski. He concluded:

“I’m happy that Metal-Plast’s impressive recent track record attracted such strong investors who are well equipped with both capital and expertise to further support our growth in the PVC recycling market. A new wave of window replacement in both Poland and Germany is anticipated and the European Commission estimates that building renovation will be necessary for over 35 million residential buildings in the EU by 2030.”

Post transaction, Eco Baltia will own 42%, S. Fedorowicz 30% and INVL Baltic Sea Growth Fund 28% of the shares in Metal-Plast. INVL Baltic Sea Growth Fund owns a 52.8% stake in Eco Baltia, while 30.5% is owned by the European Bank for Reconstruction and Development. The remaining shares are owned by the management of the company.

Metal-Plast was advised by M&A advisor mInvestment Banking S.A. (part of mBank group) and law firm Ożóg Tomczykowski. Eco Baltia and the INVL Baltic Sea Growth Fund were advised by Wolf Theiss, Sorainen, and Deloitte.

In addition, INVL Baltic Sea Growth Fund’s investment period will end in 2024. As a result, the team has already launched a fundraising programme for its successor fund – INVL Private Equity Fund II. This will seek to attract EUR300 million as a target from investors. For full information, please visit: https://bsgf.invl.com/.