Having secured a guarantee from the Altum development finance institution, Luminor Bank has granted 3 million Euros to Dižozols - one of the major private forest management companies in Latvia. The funding is intended for increasing current assets to boost business volumes and ensure timely transactions with partners.
Dižozols has received 3 million Euros in funding from Luminor for the purpose of increasing current assets. Moreover, the loan has been issued with an Altum guarantee of 80% or 2.4 million Euros. Additional funding will let the company increase the volume of round timber sales to local sawmills and other consumers of round timber, buy cutting areas and ensure timely transactions with suppliers, including small forest owners.
“Restrictions set during the emergency situation have had a minimum effect on the forestry industry. Mainly, falling prices have lowered export levels in terms of cash volumes, however, work in the industry has not stopped. Many companies are actively continuing their work, have a positive outlook on the future and are ready for development. Our goal is to support local companies and encourage economic recovery, so we are happy to support Dižozols. It is an experienced and rapidly growing company which will also be able to encourage the economic activity of other industry players by using the granted funding,” says Ilze Zoltnere, Head of Luminor Corporate Banking.
The funding granted by Luminor in combination with the Altum guarantee is an excellent way for a private service provider such as Dižozols with its own funds and asset structure to successfully borrow and invest in its own development. Juris Andžejevskis, Chairman of the Board of Dižozols comments: “For forestry industry players, the capacity of current assets is one of the most significant development factors because the ability to ensure timely transactions encourages trust, cooperation and development when dealing with partners - both big and small companies and individuals. By using the granted funding of 3 million Euros, we will be able to continue developing both towards improving our financial performance and in growing the volume of economic activity. So far we have invested much effort and resources into the development of our internal infrastructure to double our accountability and safety measures when allocating the granted funding.”
Reinis Bērziņš, Chairman of the Board at Altum explains: “The cooperation between Altum and Luminor Bank in financing the Dižozols growth project is an excellent example of how state aid mechanisms can complement private sector funding. Our guarantee to the bank provides a sense of safety when investing sizeable funds into a rapid growth project. It lets the company receive the necessary amount of funds at the bank at better conditions, including a lower interest rate and longer repayment period. Over the last months, since the beginning of the crisis, Altum has applied its financial instruments to provide support with a total impact of 235 million Euros on the economy. Of this, approximately 100 million Euros have been granted directly to companies as guarantees, enhancing the availability of funding both for company development projects and assisting in overcoming the effect of the virus crisis.”
Additional information: Inese Kronberga