Latvijas Gaze - Capital/Financing Update 2016

35 million EUR loan to be raised to refinance capital investments

In September, seeking to refinance the capital investments made in the transmission and storage system, Latvijas Gāze began a negotiation procedure on raising a loan of 35 million EUR. The second round of the procedure saw the Latvian branch of OP Corporate Bank plc selected as the winner among four contenders. The contract will be signed for 5 years with a repayment term of 10 years. The contract is expected to be signed within a month.

Latvijas Gāze pursues a long-term strategy of capital investments in its infrastructure to ensure a safe and continuous operation of the gas supply system. In 2014 and 2015 Latvijas Gāze invested 48 million EUR in the gas transmission pipelines and the Inčukalns Underground Gas Storage (IUGS). The main current long-term projects are the reconstruction of the gas collection point No.2 at the IUGS, the capital repairs of the IUGS wells, as well as the diagnostics and technical maintenance of the gas transmission pipelines.

The loan will enable Latvijas Gāze to improve the price of financial resources, thus also improving the return on capital. The world experience shows that an optimum management of a company’s funds includes a balanced use of equity and borrowings which yields both an efficient business activity and a better return to shareholders.

Vinsents Makaris

Phone + (371) 67 369 144

E-mail: [email protected]