In April 2023, UAB “Partnerystės projektai keturi”, a company belonging to UAB “Eika”, distributed a 3-year bond issue worth 8 million euros to finance a defense infrastructure facility in Šiauliai. The non-public issue was invested in by Baltic pension and investment funds managed by three fund management companies. The distribution of the issue was organized by Luminor Bank AS, Lithuanian branch.
“This is a unique case of a bond issue, when for the first time the pension funds of the Baltic countries have jointly invested directly in a development project aimed at strengthening the security infrastructure of the region. In addition, this is the third time in several years that our group has been trusted by capital market investors. This time, institutional investors have trusted the Eika group, which means that we have excellent opportunities to attract funds from a wider range of investors for the projects we are developing,” says Domas Dargis, CEO of Eika.
The issue was bought by Baltic pension and investment funds, which are managed by three investment fund managers: UAB SEB investicijų valdymas in Lithuania, CBL Asset Management IPAS in Latvia and a third unnamed Baltic pension fund manager. The issue will be listed on the Nasdaq exchange, the main bond list of the Baltic regulated market. This will provide additional liquidity to the issue, as, if necessary, pension funds will be able to trade the securities of this issue on the exchange. The listing is planned for spring 2024. Due to confidentiality restrictions related to the project, the size of the issue coupon is not published, but will be made public later during the listing.
“We are proud that the accumulated experience and the team’s expertise helped to prepare a properly structured financial product adapted to pension funds. Additional motivation is provided by the purpose of this issue – we all, albeit indirectly, contribute to the development of the defense infrastructure necessary for Lithuania and our NATO allies. Luminor has been cooperating with Eika for several years and this is one of the few companies in the sector whose team perfectly understands the alternative debt instruments market and its advantages. In addition, Eika has earned the trust of institutional investors, which provides the company with additional opportunities in implementing complex, large-scale projects,” noted Paulius Žurauskas, Head of the Markets Department at Luminor Bank.
Eika issued its first issue at the parent company level in November 2020 and successfully refinanced it a couple of years later. In September 2022, the company issued its second issue. After the issuance of the project issue in April 2024, the Eika Group will have borrowed a total of EUR 18 million in the capital markets.
UAB “Partnerystės projektai keturi” signed a contract with the Ministry of National Defence for the partial development and administration of the Šiauliai defence infrastructure in January 2021. The duration of the contract is 15 years. In October 2022, a building permit was received and construction began, which is currently underway. The planned completion of construction is in the spring of 2024.
The planned area of the battalion-sized facility in Šiauliai is 7.8 hectares. Administrative and special-purpose buildings will be built in the town: barracks, a canteen, headquarters, a medical center and sports facilities. Technical buildings will also be built: warehouses, garages, a gas station, a car wash, and a shelter for technicians. Formation and technical areas, as well as car parking spaces, including those specially adapted for electric vehicles and people with disabilities, will also be equipped.
Legal advisors Cobalt Legal and Glimstedt advised on the bond issue, and the Intertrust Group acted as the issue trustee.