Grigeo AB has attracted up to EUR 30 million investment into its cardboard and packaging business

the Company) signed the Investment and shareholders' agreement (hereinafter – the Agreement) with UAB “BSGF Salvus” (hereinafter – the Investor) – the subsidiary of the private equity fund “INVL Baltic Sea Growth Fund” (hereinafter – the Fund) on the investments in the cardboard business managed by the Company.

The Agreement provides that the Investor will invest in stages up to EUR 30 million in UAB “Grigeo investicijų valdymas”, a 100 percent owned subsidiary of AB “Grigeo”, and acquire up to 49.99 per cent of its shares. UAB “Grigeo investicijų valdymas” comprises the cardboard business companies: AB “Grigeo Klaipėda”, UAB “Grigeo Recycling”, SIA “Grigeo Recycling”, operating in Latvia and AT “Mena Pak”, operating in Ukraine and will take over the shares of UAB “Grigeo Packaging.” The transaction is to be completed upon the fulfillment of contractual terms and conditions, subject to the permission of the Competition Council is obtained.

The main objective of the investment is to expand the capacity of cardboard and packaging business within the next 5 years. With the coming of the Investor, significant development of cardboard business is expected: about EUR 150 million is intended to be invested into construction of the new paper production plant from secondary raw material, as well as upgrade of the existing cardboard business production capacity and further development of cardboard and its packaging business in the Baltic States and beyond.

The investment will be financed by own funds accumulated by the companies, Investor's investments and loans granted by financial institutions.

“In 2018 AB ”Grigeo”`s cardboard and packaging business revenues increased by 7.8 percent to EUR 72 million. It has already created c.400 jobs via their cardboard business. The market potential of cardboard and its products is growing, so the aforementioned investments will increase sales and strengthen the position of cardboard business in the cardboard market in the Baltic region”, - says Gintautas Pangonis, President of AB “Grigeo”.

Launched in June 2018, the INVL Baltic Sea Growth Fund, which target size is EUR 200 million, seeks to invest in medium-size companies with an attractive risk-return ratio, providing them with capital for further growth. In its investments, the fund will focus on taking controlling or significant minority stakes and will play an active role in the management of target companies, aiming to significantly increase their value over the long term. Target investment size is EUR 10 – 30 million.

Please find the press release attached.

Gintautas Pangonis

President of AB Grigeo

+370 5 243 58 01

Attachment

• Press release_Grigeo_2019-06-10