Control of distillery increased

Dutch-registered S.P.I. Distilleries B.V. has increased its stake in Latvia's largest liquor producer, Latvijas Balzams, to 6.2 million shares, or 82.6 percent of outstanding stock, as a result of a buyout offer to minority shareholders.

By the end of the buyout period, S.P.I. Distilleries had acquired 2.4 million shares, or 32.6 percent, in Latvijas Balzams from smaller shareholders.

A spokeswoman for the Riga Stock Exchange and the Latvian Central Depository of Securities said that for now 1.3 million shares, or 17.4 percent of Latvijas Balzams's total shares, are still in free circulation.

She said the stock exchange will continue quoting Latvijas Balzams on its second list, as the amount of the company's shares in free circulation was consistent with the listing requirements.

Before the buyout, S.P.I. Distilleries held 3.7 million ordinary voting shares, or 50.01 percent, in the distillery.

The buyout offer by the Dutch shareholder was open from April 7 to May 6. S.P.I. Distilleries offered to buy LB shares from small shareholders at the price of 1.56 lats (2.4 euros) per share.

The government also choose to accept the buyout offer and sold a 3.9 percent stake in the distillery held by the National Social Insurance Agency to S.P.I. Distilleries for 520,000 lats.

After the signing of the deal Latvijas Balzams Council Chairman Aleksandrs Kovalovs said the move was part of a restructuring of the international concern S.P.I. Group. The group wanted to acquire a controlling stake in Latvijas Balzams for more efficient decision-making regarding the company's long-term strategic development.

S.P.I. Distilleries said that after acquiring the controlling stake in Latvijas Balzams it intends to continue developing production at the distillery to ensure stable profit growth and high return on equity and assets.

The new owner has no plans for organizational changes in company management and staff.

Last year Latvijas Balzams posted a net profit of 2.4 million lats on a net turnover of 48 million lats. Year-on-year, company profit grew 33 percent, but turnover was down 0.8 percent.

Earnings per share in 2002 was 0.32 lats.

Latvijas Balzams is quoted on the second list of Riga Stock Exchange. It has a total of 7.5 million shares, of which 5.8 million are in public circulation.