Category: Uncategorized

The largest environmental and waste management group in the Baltics AS Eco Baltia is entering the bond market and seeks to issue up to 8 million EUR of unsecured fixed-rate bonds.

The maturity of the bonds is set at 3 years, with an option for the issuer to call the bonds after 2 years. Interest rate (coupon) of the bonds will be fixed for the whole period and will be set within the range of 8% to 9% upon expiration of the subscription period. Subscription period will start on the 2^nd of February and will end on the 10^th of February.

The bonds may be subscribed by qualified investors and retail investors, who will be able to purchase up to 8,000 bond units in total with a 1,000 EUR nominal value of each bond. Minimum subscription amount for one investor is set at 10 bond units, or 10,000 EUR.

The financing raised in the bond issue is intended to be used for future development projects of Eco Baltia aimed to support further expansion at the European level and promote circular economy.

In order to subscribe to the bonds, a retail investor in Latvia or Lithuania must have a securities account with a financial institution that is a member of Nasdaq Riga or has relevant arrangements with a member of Nasdaq Riga. Qualified investors may subscribe the bonds through the arranger – Luminor Bank – or through any other financial institution which is participant of Nasdaq CSD and participates in Nasdaq CSD Latvian Securities Settlement System or has indirect access to Nasdaq CSD Latvian Securities Settlement System.

General investor call with issuer investor presentation and Q&A session will be organized on 7 February at 2pm (EET). Investors can register to the webinar here: https://nasdaq.zoom.us/webinar/register/WN_l8ws-NSWSzGAp_POsa_-lQ. After filling in the application form, attendees will receive a link to the webinar and instructions to their e-mail.

“We are prepared to take the next step and attract financing in the capital market, confirming Eco Baltia’s growth story, development perspective and profitability to the investors. We are the only company in the Baltics, which provides full cycle of waste management. Our uniqueness is supported by strong business results, persuasive strategy and growing market in the Europe and abroad,” says Māris Simanovičs, Chairman of the Management Board at Eco Baltia.

“This bond issue will allow Eco Baltia to continue on its successful path of strengthening its contribution towards circular economy promotion and implement further strategic initiatives,” says Vytautas Plunksnis, Partner at INVL Baltic Sea Growth Fund and Chairman of the Supervisory Board of Eco Baltia.

Application will be made for listing the bonds at Nasdaq Riga alternative market First North within 6 months upon issue.

One of the leading financial service providers in the Baltic States – Luminor Bank – is mandated as a Sole Lead Manager of the transaction, together with Šiaulių bankas acting as Co-Manager and Dealer. Transaction legal counsel and Certified Adviser is law firm TGS Baltic, and trustee – law firm Eversheds Sutherland Bitāns.

All information about the bond issue and subscription process is provided in the Offering Document and Final Terms which can be found on Eco Baltia’s website www.ecobaltia.lv section “Investors”.

Important Notice

The contents of this announcement have been prepared by and are the sole responsibility of the Company. The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed by any person for any purpose on the information contained in this announcement or its accuracy, fairness or completeness.

This announcement is not an offer to sell nor a solicitation to buy any securities in any jurisdiction nor a prospectus for the purposes of the Prospectus Regulation. Any subscription or purchase of securities referred to in this announcement should be made solely on the basis of the information contained in the Offering Document. The information in this announcement is subject to change. Before subscribing for or purchasing any securities, persons viewing this announcement should ensure they fully understand and accept the risks which are set out in the Offering Document. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness.

Offering Document is available at the Company’s website www.ecobaltia.lv section “Investors” and copies of the Offering Document are available from the Company’s registered office. This announcement does not constitute a recommendation concerning a possible offer. Persons considering making investments should consult their financial and other advisors as to the suitability of a possible offer for the person concerned.

The largest environmental management and recycling company group in the Baltics – AS Eco Baltia in 9 months of 2022 reached its highest consolidated net turnover up to date – €154,9mn. Consolidated net turnover almost doubled, compared to first 9 months of 2021, when consolidated net turnover was €78,5 mn. Group’s net profit in comparison with first 9 months of 2021 grew by 33%, reaching €9.8 mn. Increase in turnover was partly promoted by the acquisition of Ecoservice in 2021, strong growth in PET and plastics recycling sectors and successful performance in the environmental management segment.

Māris Simanovičs, Chairman of the Board at Eco Baltia: “Year 2022 for most of the businesses and industries in Europe was full of insecurities, energy costs bounce and rapid changes in the business confidence levels in export markets. Despite that, Eco Baltia showed persuasive and dynamic growth, supported by investments in modernization, productivity, recycling capacities and further expansion in international scale. In September 2022 we completed acquisition of Czech largest polyesters fibres producer TESIL Fibres, which firms our operations as global player in recycling industry. Considering acquisition deals, we predict that our pro-forma revenues in 2022 will reach €240mn.”

In the first three quarters of 2022, Eco Baltia’s companies continued dynamic and vertically integrated growth in accordance with the long-term strategy. During the period Eco Baltia subsidiaries concluded several acquisitions to strengthen its positions in the international market and to expand services offered by the group’s companies.

In the middle of September 2022 Eco Baltia’s subsidiary PET Baltija, one of the largest PET recyclers in Northern Europe, completed the acquisition of 100% of shares of a leading Czech polyester fibre producer TESIL Fibres. As well in September 2022 Eco Baltia’s environmental management company in Lithuania Ecoservice acquired 100% of shares of the liquid waste management company Mano Aplinka plius UAB, but in January 2023 Latvian Eco Baltia vide through its subsidary completed the acquisition of road and street maintenance company Pilsētas Eko Serviss.

In the last year’s first 9 months PET Baltija continued its investments in production expansion set to more than triple the existing food-grade rPET capacities. New factory of PET Baltija is now under construction. Following the acquisition of TESIL Fibres, PET Baltija will represent the group as an international player and further strengthening its contribution towards sustainable development.

Plastic packaging recycling company Nordic Plast in the reporting period also continued organic growth supported by the investment in the production capacity. After reporting period, Nordic Plast completed the modernization project (installed new automated sorting line) to increase production capacity up to 30%.

In the first 9 months of 2022 Eco Baltia’s environmental management segment also showed stable growth, expanding business portfolio and services provided by the Groups companies. In the reporting period Eco Baltia vide launched and introduced to the market new service – portable toilets with the branding Tōcha. Launch was successful and new service convincingly conquered market, showing strong competition to other portable toilets service providers. Both in Latvia and Lithuania environmental management companies continued investment for construction debris sorting and management fields. Ecoservice made investments to broaden and improve existing construction debris sorting field, but Eco Baltia vide started construction of the new site.

Expanding the operations and continuing its development, the environmental services company SIA Eco Baltia vide, which is a part of AS Eco Baltia, the largest environmental and waste management group in the Baltics has completed the acquisition of the street and road maintenance company SIA Pilsētas Eko Serviss through its subsidiary. This provides purchase of 100% shares in the companies SIA Pilsētas Eko Serviss, SIA PES serviss and SIA B 124. For the completion of the transaction, permission of the Latvian Competition Council was received in December.

“While economic situation, rise in production costs and energy prices currently cause additional challenges to every company,it is a valuable time for businesses to seek and implement new efficiency solutions, continue development and strengthen the market positions. By expanding our business portfolio and range of services, we are becoming more competitive with a higher future growth potential. Therefore, Pilsētas Eko Serviss is a very valuable and significant addition to the family of our subsidiaries which will strengthen our leading positions in the field of environmental management”, says Jānis Aizbalts, Chairman of the Board at Eco Baltia vide and Head of the Environmental Services at Eco Baltia.

Founded in 2003, Pilsētas Eko Serviss offers such services as street and road maintenance, water drainage system maintenance and repair works, as well as equipment rental. The company is one of the leading street and road maintenance service providers in Riga and the Greater Riga region. In 2021, revenue of “Pilsētas Eko Serviss” reached 5.7 million euro. The group employs around 80 employees.

“The year 2022 has made history for the Eco Baltia group with several significant company acquisitions which keep moving us closer to the company’s vision – international leader in the field of environmental management and recycling. During the recent two years, we have grown from a local company to a player in the international market, whose pro-forma turnover in 2022 is expected to reach around 240 million euro. This year, we are planning both integration of Pilsētas Eko Serviss into our environmental management segment, as well as consider options related to new acquisitions and further investments into our current companies to improve their efficiency, production capacities and competitiveness”, stresses Māris Simanovičs, Chairman of the Board at Eco Baltia.

No changes in the current cooperation contracts of customers, partners and employees of both parties are planned at this point.

Vytautas Plunksnis, Partner at INVL Baltic Sea Growth Fund and Chairman of the Supervisory Board at Eco Baltia”: “As shareholders we have set a goal to develop Eco Baltia as a strong regional leader which is characterised by sustainability promoting entrepreneurship and development of circular economy. With this acquisition, the expansion of services in Eco Baltia group’s ever-growing portfolio will help to bring additional value both for customers, employees and investors, and further consolidate the group’s growth potential.”

The transaction was conducted by AS Latvijas Zaļais punkts, a subsidiary of Eco Baltia vide. Luminor bank provided financing for the acquisition. “We are pleased with our successful long-term cooperation and opportunity to support further growth of Eco Baltia. By setting sustainable goals and implementing principles of circular economy, company provides great potential for further development in the field of environmental management and recycling. In terms of turnover Eco Baltia is already the largest industry’s company in the Baltics, providing a full cycle of waste management. We hope that by expanding operations and providing new services, the company will open up for even wider development opportunities,” says Ilze Zoltnere, Head of Corporate Banking at Luminor bank in Latvia.