Latvijas Balzams' new majority shareholder will begin a previously agreed share buyout this week on an announcement of an expected fall in 2003 profits.
According to the buyout offer published in the press on April 4, S.P.I. Distilleries B.V., the new owner of Latvijas Balzams, will buy company shares from other shareholders from April 7 to May 6.
The buyout price is established as 1.56 lats (2.47 euros) per share.
S.P.I. Distilleries B.V. now holds 3.749 million ordinary voting shares, or 50.01 percent of Latvijas Balzams registered capital.
Previously the largest shareholder had been NTBDC LB (49.95 percent), owned by Cypriot S.P.I. and Russian liquor producer Soyuzplodimport.
The agreement for the sale of NTBDC LB's holdings in Latvijas Balzams to S.P.I. Distilleries B.V. from the S.P.I. Group was signed this March 11.
After the signing of the deal Latvijas Balzams Council Chairman Aleksandrs Kovalovs said the move was part of restructuring of the international concern S.P.I. Group.
The group wanted to acquire the controlling stake in LB for more efficient management of the company's long-term development.
In addition to the deal with NTBDC LB, S.P.I. Distilleries B.V. made deals on purchase of Latvijas Balzams shares with other market players, thus acquiring over 50 percent in the company - the stake that requires the majority owner to make a mandatory buyout offer.
Meanwhile, the company announced that it was forecasting an annual profit at 2.01 million lats, down 15.6 percent from 2002, according to the draft budget to be approved by shareholders on April 4.
Latvijas Balzams Chairman of the Board Juris Gulbis said, "We plan a rise in sales, but the effects of market price on profit and turnover are also being considered."
Gulbis told company shareholders that the distillery's existing and future capacity after further reconstruction will allow for a continued increase in production.
The company will continue trying to reduce base production costs, raising competitiveness, said Gulbis.
"Last year the Latvian alcoholic beverages market saw entry of a number of international corporations, and the company's task is to compete with them," explained Gulbis.
He added that the company was constantly researching market developments looking ahead of time.
Last year LB posted a net profit of 2.3 million lats on net turnover of 47.9 million lats.
Year-on-year, company profit grew 33 percent, but turnover was down 0.8 percent.
The company's profit in 2002 was higher than the target of 2 million lats, but turnover fell short of the planned 49.8 million lats.