The real estate investment company INVL Baltic Real Estate has signed a market-making agreement with Siauliu Bankas, which has undertaken to act as market maker for the company's shares to increase their liquidity.
"The service will commence after INVL Baltic Real Estate has placed its new equity issue and has registered the new shares. We believe greater liquidity will make our shares more attractive to retail investors," Egidijus Damulis, CEO of INVL Baltic Real Estate, said.
Under the agreement, Siauliu Bankas will provide liquidity on both bid and ask sides around the INVL Baltic Real Estate spread at least 85 percent of the trading time on the stock exchange, increasing market depth in this way.
"Experience has shown that this service not only contributes to the development of the securities market, but also serves the needs of investors, especially those who are interested in innovative real estate investment products. We believe that it will also create more opportunities for investors in INVL Baltic Real Estate shares," said Mr Tomas Varenbergas, the head of the Siauliu Bankas Markets and Treasury Department, .
INVL Baltic Real Estate is offering a new EUR 11.5 million share issue by March 4 to attract investment into the company, which has been successfully managing and maintaininga real estate portfolio. The shares are distributed at EUR 0.40 apiece, without any restrictions on the size of initial investments by individual investors. These shares are seen as an attractive alternative for those who want to invest in real estate, but do not have enough time or funds to engage in property management.
The equity issue will be sold to private investors until March 3 and then to institutional investors until March 4. Applications to acquire the stock may be submitted at the Vilnius and Kaunas branches of INVL Finasta, or at designated branch offices of Siauliu Bankas in Vilnius, Kaunas, Klaipeda or Siauliai.
The funds raised will be used to partly finance or refinance the acquisition of 6,500 sq m of offices at the Vilniaus Vartai compound and to balance the company's debt-to-equity ratio before assuming the status of a closed-end investment company. Once it acquires that status, the company's management is planned to be transferred to INVL Asset Management on the basis of a trust.
INVL Baltic Real Estate reported a net profit of EUR 4.104 million on sales of EUR 5.7 million in 2015, putting earnings per share at EUR 0.09.
INVL Baltic Real Estate manages EUR 52 million worth of assets with a total of 58,000 sq m of real estate at prime locations in Vilnius and Riga. Its Vilnius holdings include offices at Vilniaus Vartai, the IBC business centre near Konstitucijos Avenue, office buildings on Vilniaus Street in the Old Town and in Siaures Miestelis, as well as offices and warehouses in Kirtimai. The company also controls the Dommo Business Park manufacturing, warehousing and office compound near the Riga bypass. The company's shares are traded on the Nasdaq exchange in Vilnius.