Dehidra issues EUR 4 million bond: the company will expand in foreign markets

The financial brokerage firm Evernord has placed a EUR 4 million bond for Dehidra, a producer of freeze-dried products. The largest strawberry grower in the Baltics and one of the largest producers of freeze-dried products in Northern Europe intends to use the funds raised in the bond issue to expand its operations.

The two-year bond issue by UAB Dehidra was issued to private investors on a private placement basis, with an annual yield of 12% and interest payable semi-annually. The bonds will be redeemed on 10 May 2025.

"We have been working with Dehidra since 2021, when we also issued €4 million worth of Dehidra bonds in two phases. During these two years, the company has strengthened its production capacity, rapidly increased sales and expanded in export markets. The company, which operates in an interesting market, is one of the relatively rare companies in the agricultural sector engaged in high value-added, state-of-the-art production, and is therefore of interest to investors, both for its uniqueness and for its well-appreciated prospects," says Vismantė Šepetienė, Director of Evernord FMI.

According to V.Šepetienė, the issued bonds will soon be registered with the Central Securities Depository "Nasdaq CSD SE".

"After two years of working with Evernord and successfully deploying borrowed funds, we have made significant progress and grown the value of our business. Simply put, we were gaining momentum, so it was only natural to use the bonds again to finance the planned further expansion. We will use the borrowed funds to expand our export geography - we are already present in South Korea, the United Kingdom and Germany, and we intend to expand our export markets to Taiwan and the United States," says Vykintas Misiūnas, Dehidra's CEO.

In 2022, Dehidra's sales revenues amounted to EUR 4.2 million, of which exports accounted for 60%. In 2023, revenues are expected to reach EUR 10 million, with exports accounting for over 80%.

"Dehidra's product portfolio includes freeze-dried fruit and berries, snacks and smoothies. In mid-2022, Dehidra built a modern plant with two freeze-dryers as part of its first expansion phase. The plant is used for freeze-drying and packaging of own-brand Summmer products, UK brand Mixologist's Garden additives for beverages, and products for wholesalers in export markets, used as additives in the food and beverage industry. The company also supplies its own strawberries to major supermarket chains in Lithuania.

In 2024, the company plans to build two more freeze-dryers in addition to the two existing ones, increasing its annual revenue to almost €20 million.

"Dehidra has partnered with DOLE (formerly Total Produce), the world's largest supplier of fruit and vegetables to supermarkets and businesses, to sell Dehidra's produce on the international market.

"Evernord" approves EUR 6.5 million sale of 66% stake in "GET Baltic"

This week a major transaction took place in Lithuania - the gas transmission system operator Amber Grid and the German energy exchange European Energy Exchange AG (EEX) signed a EUR 6.5 million agreement for the sale and purchase of a 66% stake in the Baltic and Finnish gas exchange GET Baltic Gas Exchange. The transaction was approved by Evernord FMI - as it is well known, under Lithuanian law, company share transactions do not always require a notarial form, and can also be executed by a brokerage firm. We are delighted with the confidence of the counterparties and the opportunity to not only observe a significant transaction on the market, but also to be directly involved in its execution!

Investors are encouraged to lend when yields are rising, inflation is expected to slow down, and central bank policies are favourable

After a stressful year and difficulties in raising capital, borrowers are attracting a lot of investor interest.

In the first 18 days of the year, businesses and governments around the world have already issued almost €600 billion of bonds. That's the most active start to a year in bond markets in history, according to data compiled by Bloomberg.

After a downward spiral last year not only for equities but also for debt securities, businesses and governments faced worsening borrowing conditions, but at the start of this year issuers are seeing a sudden surge in enthusiasm from investors willing to lend.

The latter is driven by yields on debt markets not seen for 15 years and by investors' expectations of a slowdown in inflation and, consequently, of central banks cutting interest rates, possibly as early as the end of this year. This is pushing investors to lock in elevated yields.

Successful closure of the fund managing an office building in Tallinn with a 14.3% internal rate of return (IRR) for investors

"Evernord Asset Management, the asset management company belonging to the Evernord Group, has seized a favourable opportunity to realise the value created by closing its fund Evernord Real Estate Fund II, which manages an office building in Tallinn, a year and a half ahead of schedule.

"Evernord Real Estate Fund II was established in June 2019 and was a EUR 10 million fund invested in Buroo 31, a 6-storey office building in Tallinn.

"The uncertainty in the market and concerns about declining liquidity helped us decide. Especially as there was a strong offer from a buyer on the other side of the scale. I am confident that the decision to exit early with an agreed price is in the best interests of investors and is appropriate from a risk management perspective. The return of funds will allow investors to take advantage of new investment opportunities. Equity is becoming a crucial factor in the context of the high cost of borrowed funds," notes Jolanta Jurga, Director of Evernord Asset Management.

Over the last year and a half of the fund's operation, the company has been interested in the possibility of realising the building earlier than planned on favourable terms. During this period, four negotiations have been held with potential buyers of the Tallinn building managed by the fund.

The sale of the building was finalised on 15 December, immediately followed by a decision to liquidate the Fund. All units of the Fund were redeemed from investors by the end of 2022.

The building in Tallinn, managed by Evernord, is currently fully let and has a well-diversified tenant base. The building has an annual yield of 6%. The fund's investors' internal rate of return (IRR) was 14.3%.

Why is the number of closed-end funds in Lithuania the highest and what does this mean for investors?

Experts in the Lithuanian market for funds for wealthy investors are currently struggling to imagine a liquidity crisis that would lead to a rapid sell-off of assets and turbulence in the real estate sector, private equity or private debt market.

In recent weeks, liquidity woes in the camp of Blackstone, the world's largest alternative investment manager, have caused concern in some segments of the financial markets.

The Blackstone Real Estate Income Trust (BREIT), a real estate investment trust launched by the manager in 2017, has a size of around EUR 69 billion. It has recently seen a crowd of wealthy clients looking for the exit door. Recently, the volume of client withdrawal requests has exceeded the expected quarterly limit.

The BREIT challenges are not only relevant because of the potential implications for the property market, but also highlight the challenges faced by managers of funds invested in illiquid assets.

Legal Balance debt management bond issue of 2 million euros, to private investors with an 8% interest rate

Evernord, a financial brokerage firm (FMI), has launched a private placement of EUR 2 million worth of bonds of UAB Legal Balance, a debt management company. The latter intends to invest the funds raised in expanding its existing markets (Lithuania and Latvia) and entering new markets. Part of the funds will also be used to develop new products and services.

The bond issue was issued on a private placement basis to private investors.

Subject to the necessary approvals, the bonds are planned to be listed on the stock exchange and traded on the secondary market. Within three months after the bonds become effective, it is planned to apply to Nasdaq Vilnius AB for the listing of the issue on First North, the alternative market in Lithuania operated by the exchange.

The interest rate of the issue is 8%. It will be paid quarterly. The three-year bonds will be redeemed on 10 November 2025. The securities are accounted for by Šiaulių bankas AB, the trustee is Audifina UAB, and the certified advisor for the planned listing is the law firm Sorainen ir partneriai.

"This issue confirms that investors are interested in various business sectors, especially now that the bond market is dominated by real estate development projects. In this case, by issuing the bonds of a debt management company, we have offered investors to diversify their investment portfolios. This proved to be a good opportunity for them. Other attractive aspects of the issue were the interest rate and the asset backing. "This is not the first time we have underwritten a Legal Balance bond issue and we have been working with the company for three years. However, this is the first time that these debt securities will be planned to be listed, which should provide additional liquidity to the bonds," notes Vismantė Šepetienė, Director of Evernord FMI.

Marius Šlepetis, CEO of Legal Balance, says that this financial injection is also the beginning of a new phase for the company - accelerated digitalisation of services and the introduction of artificial intelligence solutions. This, he says, will make processes more efficient and faster, and will facilitate and simplify access to services for clients.

"We are a sustainable, systematically growing market player that is careful and thorough in its investment analysis. Our professional team, responsible corporate governance and ethical work with our clients set us apart in the market. The fact that investors see this and trust us with their investments inspires them to continue on their chosen path," says Mr Šlepetis.

Legal Balance, a debt management and recovery company, will also announce its three-quarter results this month. This year, compared to the same period last year, the company has recorded very strong growth both at home and in the relatively fresh Latvian market.

In Lithuania, Legal Balance's EBITDA in the comparable three-quarter period increased from EUR 1.2 million last year to around EUR 1.9 million this year. Pre-tax profit for the first three quarters almost doubled from EUR 714 thousand last year to EUR 1.3 million this year.

The 9-month EBITDA (earnings before interest, taxes, depreciation and amortisation) of SIA Legal Balance of Latvia increased from EUR 50 thousand to EUR 352 thousand this year compared to the same period last year. Pre-tax profit increased from almost EUR 44 thousand to almost EUR 346 thousand.

Legal Balance generates most of its income from debt portfolios, which the company buys from banks and other companies. The debt management self-service platform contributes less.

Newly established closed-end fund Evernord Marbella Property Fund I is looking for attractive properties in Spain

The Financial Market Supervision Committee of the Bank of Lithuania on Tuesday approved the rules of the fund to be set up by Evernord Asset Management UAB, which will invest in real estate development in Spain. "Evernord Marbella Property Fund I intends to develop a complex of 10 plots of land with villas in Marbella, Andalusia, over the next four years.

Evernord Marbella Property Fund I, a closed-end fund for informed investors, focuses on the development and financing of high-quality assets. The fund will seek to provide investors with the opportunity to invest indirectly in residential villas developed in the Marbella region. The fund will be able to invest directly, through special purpose vehicles (SPVs) managed with partners, or through the purchase of bonds issued by developers who are building villas in the area.

"The new fund has already chosen a specific investment target, the success of which we have no doubt about, as we have studied the market in detail to find the most attractive option for investors who want to diversify their portfolios geographically. The project's exceptional location - about 200 metres from the sea, a ten-minute walk to the Puerto Banus harbour and beach - is already ready for development. The project already has a valid building permit and connection to the utilities", notes Jolanta Jurga, Director of Evernord Asset Management.

"Evernord Marbella Property Fund I, together with its partners, will invest a total of more than EUR 20 million.

"Evernord's market analysis has shown that Marbella is experiencing strong and unseasonal demand for high-end properties. It is considered a prestigious region with a good climate throughout the year and, even during major crises, property prices fall much less than elsewhere and recover more quickly. This is an advantage not only for property buyers but also for investors.

The new development in Marbella has a total area of 6,400 sqm. The plots of land for villas with swimming pools, terraces and courtyards range in size from 600 to 800 sqm.

Evernord Asset Management has already been authorised by the Bank of Lithuania to manage collective investment undertakings for informed investors. The company currently manages Evernord Real Estate Fund I, Evernord Real Estate Fund II and Evernord Real Estate Fund III. The licence to manage collective investment undertakings for informed investors was granted by the Bank of Lithuania in 2017.

Why it does not make any sense to move securities accounts abroad: entries are kept with European depositories

At the start of the war, panicked wealthy clients considered evacuating their shares to Swiss banks, more than six months later, some Lithuanian financial intermediaries admit.

Representatives of Evernord, a Lithuanian brokerage firm, admit that at the beginning of the war they received "unexpected" requests to move the securities entrusted to Lithuanian FIs for accounting and management to foreign banks, allegedly because "if something happened, the enemies would be able to snatch the shares or bonds".

"After long conversations, many meetings and therapy sessions, not a single client withdrew their securities accounts," Vismantė Šepetienė, director of Evernord, recalls to VŽ her work with clients during the first days of the war.

Evernord Real Estate Fund III and Marijas 2 SIA raise another 5 million euros. for an office building in Riga

Evernord, a financial brokerage firm, and its partners have placed EUR 5 million of bonds of Evernord Real Estate Fund III and Marijas 2 SIA, a company managed by the Estonian development company Novira, in a private placement. This is the third round of Evernord's bond issue with partners, with the funds borrowed from Baltic investors being used to develop Novira Plaza Riga, an office building complex in the centre of Riga.

In total, Evernord and its partners have already raised EUR 15.5 million in three rounds of bond issues, with a total planned borrowing of EUR 45 million.

Institutional and private investors from Lithuania, Latvia and Estonia participated in the third round of the bond placement. In this round, institutional investors bought back more than one third of the total issue. "Evernord notes that the contribution of professional investors has increased with each round of Marijas 2 SIA.

"We have no doubt about the success of this project, in which we are investing the funds we have raised - already last week the 7-storey Novira Plaza business centre has reached the highest point in the construction of this building. Construction is proceeding smoothly according to plan, despite this year's challenging circumstances, increased raw material prices and broken supply chains. We are experiencing investor interest, which is not surprising - the project is attractive due to its unique and promising location in Riga, as well as its prospects and bond yields," notes Vismante Šepetienė, Director of Evernord FMI.

According to Ms Šepetiene, the annual yield of Marijas 2 SIA bonds is 7.7%. The investment attractiveness of the bonds is also enhanced by the fact that they are secured by a first-ranking mortgage and a pledge of escrow funds. The bonds are listed on Nasdaq CSD SE.

The interest coupon on the bonds will be paid quarterly. The issue will mature on 30 May 2024.

The funds raised in the third phase of the bond placement will be used to carry out various exterior and interior works on the business complex, such as the installation of the roof, window profiles, façade profiles, the installation of ventilation and cooling systems, the commencement of the installation of utilities, etc.

A total investment of EUR 55 million will be made in the construction of the business complex in the heart of Riga. Construction is expected to be completed in August 2023 and the first tenants are expected to move into Novira Plaza in the third quarter of 2023.

"The supply of modern office buildings in the centre of Riga is still very limited, with the majority of offices located in renovated former apartment blocks away from the centre. Novira Plaza, meanwhile, is being built in the very heart of Riga, close to major transport hubs and the Old Town of the Latvian capital. We see excellent prospects for this project," says Jolanta Jurga, founder of Evernord Group.

The office building is surrounded by prestigious hotels, the newly opened Origo shopping and office centre, and the nearby Riga Central Station, which is scheduled for completion in 2025. Novira Plaza is just 20 minutes' drive from the airport.

The newly developed Riga business complex is distinguished by its modern architectural and sustainability solutions. The construction is being carried out by Velve, one of Latvia's largest construction companies, and is being done in accordance with the LEED Gold standard, a globally recognised symbol of sustainability. The architectural solutions for the business centre were developed by the Latvian company Architect Bureau BB studija.

Successful completion of a leisure facility project in Juodkrantė, with a 39% return for investors

Evernord, the investment management company that launched the former holiday home in Juodkrante as apartments, earned a 39% return on the project for investors.

"Evernord has completed a real estate project in Juodkrante, where Smilga holiday homes were converted into 33 holiday homes or apartments and sold. According to representatives of the investment management company, a 39% IRR return was earned.

According to the press release, the company's "investor-managed company" launched the project at the end of 2020.

"The value of the project at the time of realisation of the premises exceeded EUR 3.1 million. Given the size of the project and the need for expediency, a fund structure was not chosen to make the investment. It is an exclusive product created for a few of our investors", Arnas Vedeckis, CFO and Member of the Board of Evernord, explained to VŽ.

Among the buyers were also existing Evernord clients, who were buying homes "not only for themselves but also for investment".

The building in Kalno Street in Juodkrante was previously occupied by the holiday home "Smilga". The 990 square metre building contained 33 small holiday apartments.

"When we started the project, the COVID-19 vaccine was not even available yet and there was a lot of uncertainty. However, we have noticed that due to the pandemic restrictions, people are more likely to take their holidays at the Lithuanian seaside and real estate is slowly becoming more and more important. We used this insight to launch the Smilga project," the report quotes Jolanta Jurga, founder of Evernord and author of the Smilga project.