The Company was founded in 1993 and operates in the business of paint, wood varnish and PVA glue production. From the foundation in Estonia, the Company though organic growth and acquisitions has expanded to Russia, Ukraine, Finland, Belarus and Latvia. In all countries apart from Latvia (only engaged in distribution) it operates a manufacturing plant. The Company focuses on the consumer paint segment and has a portfolio of established brands in each of the markets. The Company has attracted reputable pan-Baltic mezzanine investment fund BPM Capital, whose investment was used to refinance investments from the European Bank of Reconstruction and Development (EBRD) and Darby Capital Partners. Operations in Ukraine are funded by well-known Scandinavian investment funds Swedfund International and Nefco.  

 

A bankruptcy of the servicing bank in Russia has resulted in inability to extend the existing banking loan agreements in that market. As a result, the group companies have streamed capital to the Russian daughter company to repay maturing bank loans. This has led to a lack of working capital to execute larger orders and operate at the optimal production capacity. The Company is actively working on finding a new lending bank for the Russian market, in parallel it is seeking further equity injection to provide an exit for BPM Capital and ensure capital for further growth. Hence the Company is seeking a 12-month bridge financing from Capitalia in the amount of EUR 400,000. Investors are offered an 11.52% annual (0.96% monthly) interest rate with monthly amortization schedule. Investors of EUR 25,000 and larger are provided with additional interest of 0.04% monthly bringing their return to 12% annual. The loan is backed with a personal guarantee from the beneficial owner and guarantees from three largest group companies. An additional stipulation in the loan agreement will be added that in case if BPM Capital is exiting its investment from the Company, the balance of Capitalia loan will have to be repaid.  

There is a number of factors that make lending to the Company an attractive opportunity and the main highlights are the following:

• The Company has over 25-year experience in the market with well-known and popular paint and varnish brands;
• A list of previous and current reputable investors provides for high reliability of implementation of good governance principles; 
• Financing is secured with a personal guarantee from the owner and 3 related companies;
• As experienced by the Company, the industry performs well during economic downturns due to increase of small repairs; 
• The Company and its group companies are audited by Baker Tilly;