Grigeo
Other information

GRIGISKES AB is waiting for a convenient moment to release a new share issue

Vilnius, Lithuania, 2011-11-15 08:25 CET -- The Board of GRIGISKES AB is asking the company’s shareholders to extend the validity period for permission to release a new share issue. If shareholders approve, the investment bank SEB Enskilda will act as an intermediary in the release of a planned total of 10 million ordinary registered shares at a nominal value of 1 LTL each. The company will use the attracted funds for a more rapid development. In addition to the direct goal of attracting funds for development, the company also has long-term objectives in the capital markets, i.e. strengthening the base of investors, increasing the visibility of shares and their liquidity on the exchange.

GRIGISKES AB decided in April this year to release a new share issue, but it was decided to postpone the distribution of the issue when the finance markets became overwhelmed with negative expectations.  The company and its advisers decided to observe and analyse the situation during the nearest six months, and attract financial investors under favourable terms when the conditions become favourable.

“The situation in financial markets at the moment is tense and it is not a good moment to release a new share issue; however, the situation is changing, and we, with the approval of shareholders, are determined to be fully prepared to implement our plans soon as the proper conditions develop in the market”, says GRIGISKES AB General Manager Gintautas Pangonis.

The head of the company says that GRIGISKES, a group of companies that produces toilet paper, cardboard and wood products, plans to dedicate all the extra capital raised to investments. According to the investment program, the group plans to invest 44.9 million litas in toilet paper production and 17.3 million litas in cardboard packaging material production. The distribution of the issue would enable the implementation of the investment programme during 2012–2014. The company is also open for an alternative scenario in which the investment programme would be implemented over a longer period of time from the operational money flows of the Company.

Currently, the company is successfully funding expansion mostly from its own funds. A new department for cardboard packaging production is already being built. In the 1st quarter of 2012 it is intended to start a new cardboard corrugation line and new cardboard box production lines.

The consumption of toilet paper in the Baltic countries is far lower than in more established European markets. For example, in Scandinavian countries, each person uses per year an average of 17–19 kg of toilet paper, whereas in Lithuania the statistic is just 6.5 kg. In Lithuania the use of cardboard packaging is also only about one quarter of what it is in the more established European markets.

“These figures show that the market potential of the Baltic and neighbouring countries is still not yet realised. We see great potential for growth here, which is why we are seeking to increase the competitiveness of our products through investment and expansion, thereby lessening business risk and strengthening our position in the regional markets”, says GRIGISKES AB General Manager Gintautas Pangonis.

When launched in February this year new biofuel-powered 18 MW boiler, GRIGISKES AB became less dependent on imported natural gas and its possible price rises. The wood-based biofuel used for the production of steam is only half the price of natural gas imported from Russia.

Over the first 9 months of this year, the GRIGISKES group of companies achieved sales turnover of 235.2 million litas and earned 8.3 million litas in profits before tax. Over the same period the sale of GRIGISKES AB products reached 120.4 million litas, with profits before tax of 4.6 million litas. 

In comparison with the same period last year (2010), the GRIGISKES group of companies achieved an increase in sales worth 65.1 million litas, and 29.6 million litas for GRIGISKES AB itself. Compared with 9-month results for 2010, the group’s profits increased by 1.4 million litas, and 3.3 million litas for GRIGISKES AB itself.

The GRIGISKES group of companies consists of the manufacturing firms GRIGISKES AB, Baltwood UAB, Klaipėdos kartonas AB, and Mena Pak OAO.

         Gintautas Pangonis
         General Director
         (+370-5) 243 58 01