RIGA - Grindex, Latvia's largest pharmaceutical company, has successfully floated its issue of new shares, raising 12.7 million lats (18.1 million euros) to help tackle its ambitious expansion plans.
West European investors bought up 39 percent of the offering, while Scandinavians accounted for 38 percent and Balts 23 percent of shares sold. In all, new investors purchased 74 percent of the issue, according to Suprema Securities, an investment firm that managed the deal.
Board Chairman Valdis Jakobsons said that the funds would open many opportunities for the company. Grindex is likely to invest the funds in product development and market expansion. The company opted for equity capital since, in the words of shareholder Kirovs Lipmans, its stock price, quoted on the Riga Stock Exchange, has been growing quickly.
Nor has Grindex hid its ambitions in recent months. In early June, the company announced that it had placed a bid for Poland's Jelfa, which is currently being privatized. Grindex wanted to acquire the entire state-owned stake 's or 47.35 percent 's as part of its plans to expand production capabilities within the EU.
"By acquiring a substantial stake in the Polish company, Grindex sees opportunities for expanding its product portfolio using its scientific and technological potential and successfully combining the capacity of its pharmaceuticals plant with that of Jelfa's medical preparation production, especially regarding medicines meant for injections and liniments," finance director Janis Romanovskis was quoted as saying.
Jelfa is one of Poland's largest pharmaceuticals companies. According to the company's Web site, it posted 2.1 million euros in profit on sales of 60.7 million euros in 2004.
By comparison, Grindex earned 2.4 million lats on a turnover of 24.7 million lats (35.2 million euros), up 32 percent year-on-year. Shareholders decided to use the earnings for development and increasing the company's competitiveness. "We want to invest money in our employees' education as well as to purchase a pharmaceuticals business," Jakobsons was quoted as saying at the time.
In May, Grindex reported that it had bought Kalceks, a Latvian drug maker, for 3.4 million lats. Council Chairman Kirovs Lipmans said at the time that Kalceks had been an attractive acquisition for both its product portfolio and real estate assets. The same month it announced plans to build a 3.3 million lat active substance plant and laboratory, and expressed hopes to win EU structural funds for the project.
The company is controlled by several private shareholders, including Lipmans, his spouse Anna Lipmane, former Aldaris director Vitalijs Gavrilovs and Janis Naglis, former head of the Latvian Privatization Agency.
