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Lithuania's Grigeo puts off planned investment amid economic growth slowdown, CEO says
BC, Vilnius, 01.10.2019.
Print version
Print versionLithuania's paper and wood industry group Grigeo says it is putting off its planned 150-million-euro investment in a new cardboard factory due to worsening economic conditions, reported LETA/BNS.
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The company said that it has cancelled a planned 30-million-euro investment by a fund of Invalda INVL, one of the Baltics' largest asset management groups, into its cardboard business.
"We are refraining for now (...). I cannot say we have no plans to build (a new factory), but we are refraining for a while," Gintautas Pangonis, Grigeo's president and majority shareholder, told.
"You probably hear what economists say, and we have listened to that. This is because we see that there is some slowdown (in economic growth). With the economy slowing down, it is probably not the best time to make such investments," he said.
The deal has been cancelled due to changes in Grigeo's investment strategy, the company told the Nasdaq Vilnius Stock Exchange on Monday.
Grigeo, which is listed on the market's blue-chip Main List, is to pay 1 mln euros for the termination of the agreement.
"We have cancelled that transaction at our initiative following changes to our company's investment strategy. I cannot comment further at this point," Pangonis he told earlier in the day.
According to Pangonis, Grigeo is currently not holding talks with any other investors.
Under the investment and shareholder agreement signed on June 10, BSGF Salvus, a subsidiary of INVL Baltic Sea Growth Fund, was to acquire up to 49.99% of shares in Grigeo's investment management subsidiary, Grigeo Investiciju Valdymas, in two stages.
Grigeo Investiciju Valdymas owns the Grigeo Group's subsidiaries Grigeo Klaipeda, Grigeo Recycling, Grigeo Packaging, Grigeo Recycling Latvia, and Mena Pak in Ukraine.
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