RIGA - In order to raise additional money for its long-term capital investment program, power utility Latvenergo plans to hold a public bond issue at the end of this year, reports Nozare.lv. The bonds will be included on the Nasdaq OMX Baltic stock exchange’s list of debt securities; the nominal value of the bonds is planned at 50 million lats (71.4 million euros). The specific terms are yet to be decided.
SEB Group has been selected to manage the bond issue.
Any resident or legal entity of Latvia will be able to buy the bonds at the stock exchange, said Latvenergo board member Zane Kotane. She believes that Latvian pension funds and investors from other European countries will also be interested in buying the bonds. Latvenergo notes that the bonds will not be converted into the company’s shares.
The money raised through the bond issue will be used to finance Latvenergo group’s investment projects in electricity production and distribution. Until now, Latvenergo co-financed its long-term capital investments through bank loans.
As a result of the bond issue, Latvenergo will acquire additional financing on favorable conditions, diversify its lenders’ portfolio and raise its profile with investors, which will make it easier for the company to attract funding for investments in the following years, the company says.
Latvenergo CEO Aris Zigurs is confident that investors will be interested in the bonds. “The decision to enter the capital market will test the company’s stability and maturity. Bonds are usually issued if prospective investors are certain about the company’s stability, popularity and competitiveness,” said Zigurs.
Latvenergo group’s capital investments last year amounted to 198 million lats, and annual capital investments for the coming years are projected at this same level.