RIGA - One of Latvia's largest dairy companies, Rigas Piensaimnieks (Riga dairy producer), has decided against quoting its shares on the Riga Stock Exchange, as earlier planned, company board chairman Edgars Stelmahers said on Oct. 11. "The plans have been cancelled because an investor was found," said Stelmahers.
Stelmahers declined to name exact figures, saying that the investment plan was underway. Rigas Piensaimnieks will have to increase production capacity because of growing sales, he noted.
In an Oct. 3 press release, the American based mezzanine financer Darby Overseas Investments reported that the company had made an 8 million euro investment into Rigas Piensaimnieks, which, according to Marek Jakubczyk of Darby's Poland office, gives them a 20 percent stake in the firm.
"We are pleased to invest in AS Rigas Piensaimnieks. It is a well-established leader in the Baltic region's dairy business, with widely recognized brands in Latvia. The firm has tremendous potential for growth due to the rapid increase in consumer wealth across the region," Richard Frank, Darby's chief executive officer commented in the press release.
Although exact figures are unknown, the strategic investor kept Rigas Piensaimnieks from joining the stock market. Jakubczyk said the name of the investor should be announced next year.
Darby Overseas Investments is the private equity arm of Franklin Templeton Investments, based in San Francisco.
Last week, Rigas Pienaimnieks announced Swiss bank Awsbacher, owned by U.K. Investment Bank, as the new owner of the company. According to Rigas Piensaimnieks, these changes were necessary for the dairy to step up expansion in Europe.
Rigas Piensaimnieks was founded in 1993. Last year, the dairy producer showed a turnover of 21.6 million lats (30.8 million euros), and has shown 16 percent annual growth. Profits increased by 20 percent to 2.4 million lats. The company's share capital is 477,600 lats.