During the period between its foundation on 3 September 2007 and 31 December 2008, investment and advisory firm Riga Capital has undertaken several significant assignments, growing both of its key business areas: investment management in companies that have long-term growth potential and advisory services which are particularly sought-after during the recession as companies are looking to rationalise and restructure their operations.

Despite the current economic and financial crisis, Riga Capital sees considerable potential for economic growth in the CEE and the Baltic States. Once the global economy returns to economic growth and certain conditions are satisfied, the value of investments in the region’s companies is set to increase.

In September 2008, MVC Capital, US based investment fund whose shares are traded on the New York Stock Exchange, in cooperation with Riga Capital, acquired a controlling interest in Lithuanian engineering solutions company Fima. The transaction marked one of the largest deals in the Baltics in 2008, at a time when investor interest in the region was at a record low, underlining Riga Capital’s competence in fundraising and investment management. Fima however is planning business development in Latvia and Poland, as well as in other markets in the Baltic Sea region. Fima specialises in designing and implementation of complex engineering solutions. The largest completed projects include modernisation of the infrastructure of Lithuanian Railways and engineering solutions in Vilnius Airport.

Another important assignment of Riga Capital was provision of advisory services to Parex Bank from 5 December 2008 to 1 May 2009. When the Latvian Government took over the bank in late 2008, a new management board was installed and it was essential to restore the stability of Parex, hence there was a need for support in managing the crisis-hit bank. Rigas Capital worked on the restructuring of the bank’s syndicated loans, which resulted in agreement on deferred payments for the total amount of EUR 775 million, thereby successfully concluding negotiations with 60 banks from around the world. Riga Capital also led the financial and legal due diligence for the European Bank for Reconstruction and Development (EBRD) and participated in negotiations on its investment in Parex, which were successfully concluded on 16 April when the EBRD became a minority shareholder of the bank. Further, Riga Capital managed the new strategy formulation and drafting of the bank’s restructuring plan which was instrumental for Parex going forward and to comply with the European Commission requirements on state aid.

During the period under review, Riga Capital has covered the costs related to the proposed management buy-out deal of telecommunications company Lattelecom, which has been postponed indefinitely.

In 2009, Riga Capital is planning business growth despite the crisis, as the demand for restructuring services is set to increase. In terms of investments, the most prospective segments are venture capital investments in SMEs, which are essential for the economy of Latvia, as well as distressed assets, whose value is going to increase as a result of strategic and product portfolio restructuring when the crisis subsides.

For further information:

Kristīne Bērziņa,

Riga Capital chairperson of the board

E-mail: kristine.berzina@rigacapital.com

Phone: +371 67217757

Fax: +371 67282602