Lacplesa Alus, Gutta bought by Nordic investors

  • 2004-10-27
  • By TBT staff
RIGA - Two major drink producers announced over the past week that they had been bought by foreign investors, continuing the strong postaccession trend of foreign capital gaining exposure to Latvia's food and light industries.

Denmark's Bryggerigruppen (The Danish Brewery Group) announced on Oct. 20 that it had agreed to purchase an 83.5 percent stake in Lacplesa Alus brewery for 3.8 million euros. Lacplesa Alus is the third largest brewer in Latvia by market share (11 percent) and expects to post revenues of 6 million euros this year.

Earlier this year the Danish company purchased Cido Partikas Grupa, a major producer of juices and other beverages, as part of its "V8 strategic plan" that identifies the Baltics as a key expansion area. The Danish Brewery Group is the second largest brewery in Scandinavia, comprising four Danish breweries and two Lithuanian breweries.

However, this latter acquisition was thrown into doubt this week when a Riga Regional Court upheld a previous ruling by the Riga Northern District Court to arrest a 15 percent stake in Cido.

The Cido food group stakes remained under court restraint by refusing an appeal by the company's three co-owners, who had filed a claim against the initial ruling. The regional court ruling may not be appealed.

The initial ruling placed a court restraint on 15 percent of Cido following a claim submitted by former co-owner Maksims Peredistijs, who challenged a 1996 Cido shareholders' decision to exclude him from the list of owners without his own consent. He was living in the United States at the time.

The Lursoft data base reports that Peredistijs was a 1 percent stake owner in Cido Partikas Grupa from May 1995 to April 1996, the Baltic News Service reported.

The court ruling to arrest the stakes is likely to delay the planned acquisition of Cido by The Danish Brewery Group, which announced it would buy the juice maker for 10.2 million lats (15 million euros). Total investments are expected to be greater, as Cido carries an impressive debt of 5.07 million lats.

Lacplesa Alus, which produces beers under the Lacplesis trademark and also distributes foreign brands such as Budweiser and Grolsch, has a sizable debt - 2.5 million euros - which company officials say is made up of overdue tax payments and liabilities to other creditors. Since the acquisition price includes payment of this debt, Lacplesa Alus' group of individual owners stands to gain approximately 1.3 million euros from the deal.

No changes in brewery management will be made until The Danish Brewery Group takes over the company, Lacplesa Alus shareholder and board member Igors Drozdovs told the Baltic News Service.

Meanwhile, Nordic Partners, a Latvian-registered company with Icelandic capital, announced that it had acquired 96.89 percent in Gutta, the second-largest juice maker in Latvia.

"The company has significant prospects for expanding also on foreign markets. I was an adviser to the acquisition and have watched Gutta's growth in recent years, therefore I regard this purchase as a good long-term investment," said Icelandic businessman Gysli Reynisson, a shareholder and board chairman in Nordic Partners and who is also a council member for the Staburadze confectionery.

As Nordic Partners have acquired over 50 percent in Gutta, it will now have to make the mandatory buyout offer to minority shareholders. The decision could be made at the shareholder meeting on Oct. 29.

Gutta spokesman Krisjanis Liepins told the Baltic News Service that the change of owners would not affect the company's operations.

A few years ago after a stake in Gutta changed hands, a rumor began that Reynisson had set his sights on the company. The Icelandic businessman neither confirmed nor denied the allegations. Boninvest and Ellipse Electronic Limited subsequently bought the juice maker, though no details about these companies were released.

Last year Gutta showed a profit of 235,200 lats, up 2.3 times from 2002, while its net turnover increased 26 percent to 8.7 million lats.