Purpose of the Bond Issuance

VLI Timber is issuing bonds to raise working capital for the development of a new production facility in Jonava. The plant is expected to start operations in 2027 and will increase the company’s processing capacity from 120,000 m³ to more than 300,000 m³ of wood per year. The facility will be constructed by an external partner under a built-to-suit lease model and leased to VLI Timber upon completion. Bond proceeds will primarily be used to finance equipment procurement – a critical step for launching operations.

The company has secured €8.1 million in government subsidies, covering up to 80% of eligible equipment costs. However, these funds are available only after procurement, via a reimbursement model. Thus, bridge financing through bonds is essential to complete the investment cycle.

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During the bond placement, demand reached EUR 4.2 million, with approximately 450 investors participating in the public offering. Three-quarters of them were retail investors. Of all participants, 71% were from Lithuania, 11% from Latvia, and 18% from Estonia.

Retail investor orders were fully allocated, while institutional investor orders received partial allocations.