Latraps is preparing for its first public bond offering, which will be open to both Latvian and foreign investors. Roberts Strīpnieks, Chairman of the Board of Latraps, said that the cooperative's decision to issue bonds was determined by the scale of the investment project.
"The pea processing plant project we are planning is a mid-21st century project in terms of technology. We are using the most advanced, best, and highest quality technological solutions, ideas, and equipment in the world today," said Strīpnieks. "Consequently, the scope for this type of plant is also very ambitious. Our total investment in the pea processing plant will exceed €130 million, which is a huge figure. This investment project would also be large in Central Europe and the United States, let alone Latvia. Our task is to finance this project so that we do not lose control of the Latvian side, the Latvian co-operation, at any moment."
ASNS Ingredient is expected to start construction of the new plant at the end of 2024. Currently, the information document for the bond issue is still in the approval phase and further details are expected by the end of November. The bond issue has been arranged by Signet Bank on behalf of the cooperative.
Strīpnieks said that, as information about the planned bond issue became public, there was interest from Latvian, Baltic, and foreign investors. He did not disclose how much funding would be raised through the bond issue.
A strategic partner, the German food industry company Pfeifer & Langen, has joined the project, a Dutch company is also expected and the bond issue will provide sufficient funding for the construction of the plant.
The new plant will produce pea protein, Strīpnieks said.
"We are talking about a pea protein isolate of close to 100% purity, which is a liquid and can be further used as a basis for the production of all kinds of food products. The production of a technological solution and a product of this quality is a novelty not only in Latvia and the Baltics, but is currently unprecedented in Northern Europe," stressed Strīpnieks.
Kaspars Peisenieks, Executive Director of the Investors' Club, positively evaluated Latraps' step, noting that this is the first public bond offering of an agricultural company in Latvia. There have already been such in the Baltics.
"Bonds have become a very popular instrument recently. On the one hand, there is investor demand, and companies are actively using the opportunity to raise funds from investors rather than from one particular bank or syndicate of banks," Peisenieks said. "Such an offer also means that the company has relatively more flexibility. Food is a commodity, and one could say that there could be some clarity about the future. But it has to be taken into account that no investment is 100% guaranteed. Other things happen that cannot be controlled."
Peisenieks said that investors' sentiment could be affected by potential financial problems at Lithuanian agricultural company Auga, and bond investors are concerned. Peisenieks hopes, however, that this will not have a significant impact on Latraps' bond issue.
