AS Eco Baltia, the largest environmental and waste management group in the Baltics, with significant interest from investors issued 8 million EUR of its inaugural 3-year bonds. Issue was oversubscribed more than 3.5 times with orders from over 250 qualified and retail investors from Latvia and Lithuania.
“Eco Baltia’s successful bond issue and significant interest from investors is an affirmation to the strength and stability of our company. The high demand and oversubscription of more than 3.5 times of our bonds is a clear indication of the trust and confidence investors have in our company and its growth potential. We are grateful for this trust, which shows that Eco Baltia is on the right track and can move forward with confidence, executing its strategic goals to create long-term value for all our stakeholders,” says Māris Simanovičs, Chairman of the Management Board at Eco Baltia.
The proceeds raised from bond issue will be used to finance future development projects of Eco Baltia, with a focus on supporting the company’s expansion plans in Europe and promoting the circular economy. The Group is currently evaluating several acquisition opportunities. In addition, the company has several capital expenditure projects in its pipeline.
“Funds raised from investors will be used for acquisitions. Also it will allow company 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.
Total volume of received orders was 28.49 million EUR, more than 3.5 times exceeding the maximum amount of the planned bond issue. The size, quality and diversity of the orders enabled Eco Baltia to set the annual coupon rate at 8%, the lowest end of the indicated range. The tenor of the bonds is set at 3 years with the maturity date 17 February, 2026 and an option for the issuer to call the bonds after 2 years. Nominal value of each bond is 1,000 EUR. Bonds will be issued at nominal value and minimum subscription amount for one investor was set at 10 bond units, or 10,000 EUR.
Investors who placed the minimum order of 10,000 EUR were allocated in full, while bigger orders received partial allocations. Retail investors were very active in this transaction and were allocated 5.5 million EUR (69%) of the total issue with institutional investors making up the remaining 2.5 million EUR (31%). Most of the demand came from Latvian and Lithuanian investors with subscription amounts standing at 54% and 45% of total orders respectively.
“Eco Baltia had all the prerequisites for the planned bond issue to be successful and for investors’ interest to result in significant demand. Solid business model, credit story and values resonated with investors and generated substantial interest in the transaction, both in Lithuania and Latvia. We are pleased to have been a part of this transaction and are happy to welcome our long-term customer Eco Baltia joining the Baltic capital market,” emphasizes Gints Belēvičs, the Head of Markets Customers in Luminor Bank, the Sole Lead Manager of the transaction.
On February 8, 2023 company applied for listing the bonds at Nasdaq Riga alternative market First North and on February 9 Nasdaq Riga started the admission procedure.
Sole Lead Manager of the transaction was Luminor Bank 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.
Offering Document and Final Terms of the transaction are available at Eco Baltia’s website www.ecobaltia.lv section “Investors”.
About Eco Baltia
Eco Baltia group is the largest environmental and waste management group in the Baltics, providing the full-cycle waste management solutions from waste collection and sorting to secondary raw material logistics, wholesale and raw material processing as well as PET and PE/PP plastics recycling.
In the first nine months of 2022, the Eco Baltia group reached its highest consolidated net turnover up to date – €154.9 mn. Consolidated net turnover almost doubled, compared to first 9 months of 2021, when consolidated net turnover was €78.5 mn. In September 2022, the group expanded its operations outside of the Baltics, with its PET recycling arm AS PET Baltija, one of the largest PET recyclers in Northern Europe, completing the acquisition of a leading Czech fibre producer TESIL Fibres. In January 2023 Eco Baltia also completed acquistion of Latvian street and road maintance company Pilsētas Eko Serviss.
The group companies employ more than 2,300 employees in Latvia, Lithuania, and Czech Republic. Its leading companies are PET Baltija, Eco Baltia vide, Pilsētas Eko Serviss, Latvijas Zaļais punkts, Nordic Plast, JUMIS, Czech TESIL Fibres and Lithuania-based Ecoservice.
Shareholders of Eco Baltia are private equity fund INVL Baltic Sea Growth Fund (52.81%), the European Bank for the Reconstruction and Development (30.51%) and management of the company (16.68%).
INVL Baltic Sea Growth Fund
With a size of EUR 165 million, the INVL Baltic Sea Growth Fund is one of the largest private equity funds in the Baltics. The European Investment Fund (“EIF”) is its anchor investor.
The EIF, which is a part of the European Investment Bank, has committed EUR 30 million with the support of the European Fund for Strategic Investments (a key element of the Investment Plan for Europe, or ‘Junker Plan’) whilst also allocating resources from the Baltic Innovation Fund, a “fund of funds” initiative developed in cooperation with the governments of Lithuania, Latvia and Estonia. The initiative aims to increase capital investment in high-growth potential small and medium-sized enterprises in the Baltics.
The fund seeks to assemble a diversified portfolio of companies, targeting majority or significant minority stakes through investments ranging from of EUR 10 million to EUR 30 million. These companies must demonstrate high growth potential and an ability to succeed in conditions of increasing global competition and market volatility.
The fund is focused on the Baltic countries and neighbouring regions including Poland, the Nordics, and Central Europe. The fund has invested in seven companies to date, focusing on sectors including healthcare, medical rehabilitation, civil engineering, environmental management (plastic recycling and waste management), veterinary services, and the manufacturing of cosmetics and hygiene products.
The fund is managed by INVL, the leading Baltic investment management and life insurance group. The group’s companies manage pension and mutual funds, life insurance directions, individual portfolios, private equity as well as other alternative investments. More than 300,000 clients in Lithuania, Latvia and Estonia plus international investors have entrusted the group with the management of over EUR 1.75 billion of assets. With a track record spanning 30 years, the group has strong expertise and experience in managing private equity assets and building true market players that are leaders in their respective fields in the Baltic countries and across Central and Eastern Europe.
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 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 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. Persons considering making investments should consult their financial and other advisors as to the suitability of a possible offer for the person concerned.