Sorainen, working with Wolf Theiss in Poland, has advised iCotton on obtaining a EUR 10 million loan from the Altum Capital Fund. TGS Baltic advised the lender.
According to TGS Baltic, Altum is cooperating with existing iCotton financiers Blue Orange Bank and Poland's mBank as a part of the transaction. The firm reported that "iCotton, which sells 98% of its production in export markets, faced supply chain disruptions, rising logistics costs, and changing payment terms. At the same time, the pandemic boosted demand for the company's hygiene products."
According to Sorainen, the loan will improve iCotton’s cash flow and facilitate its development by introducing new products from environmentally friendly raw materials.
Hygiene product company iCotton employs 800 people at its plants in Latvia and Poland and had a turnover of EUR 80 million last year. iCotton’s products include cotton swabs and other cotton products, wet wipes, as well as the production of non-woven cotton fabric. The company's customers include retail chains Rossmann, Carrefour, Rimi, Maxima, Biedronka, and Kaufman.
Altum Capital Fund has a total worth of EUR 100 million, half of which is public funding with the other half being private pension funds. The company can invest up to EUR 10 million in corporate capital, corporate bonds, or loans.
"iCotton is characterized by a modern production base and continuous investment in development," Chairman of Altum’s Management Board Reinis Berzins commented. "We are pleased to make this financing of the Capital Fund and support this flagship of Latvian exports, helping to overcome the impact of COVID-19 and increasing its ability to attract new investments in the future and further increase its operations. The total amount of transactions concluded by the capital fund has already reached EUR 33 million and the fund is actively working on the preparation of future transactions."
The Sorainen team was led by Managing Partner Eva Berlaus and Senior Associate Natalija Sestakova.
The TGS Baltic team included Partner Inese Hazenfusa and Associate Martins Galzons.