OREANDA-NEWS. Shareholders of Invalda LT, one of the major Lithuanian investment companies, approved the preparation of the split-off terms. This will allow to realise the earlier announced decision to concentrate into asset management business.

It is planned to separate agricultural land, real estate and information technologies (IT) companies from Invalda LT. These companies will apply for closed-end investment company licenses. All shareholders of Invalda LT (presently there are about 4000 shareholders of the company) will proportionally own shares in the separated companies. All the shares of the newly established companies are planned to be quoted on the NASDAQ OMX Vilnius Exchange.

“The Board expects to announce the split-off terms in the first quarter of this year, and the shareholders will vote upon the approval of the terms. Invalda LT will establish the management company which will manage separate companies, in essence similar to investment funds” - Darius Sulnis, the president of Invalda LT, said.

According to Mr. Sulnis, all separated companies will seek to raise additional capital thus increasing the liquidity.

The reorganization will allow investors to select the asset or business in which they would like to invest. “The investors will be able to select the risk level as well as the term of the investments. By licensing the activities and being under the supervision of the Bank of Lithuania, there will be an increase in transparency and reduction in investment risk,” - Mr. Sulnis said.

The agricultural land investment company will be established on the basis of 17 companies (altogether they own about 3 thousand hectare of land in Lithuania) owned by Invalda LT, AB. “It is planned that this company will not use borrowed capital. We think that a company generating stable cash flow that exceeds the inflation rate and has a small degree of risk might be an appropriate long-term savings instrument, an alternative to investments in deposits and bonds”, - Mr. Sulnis said.

According to Mr. Sulnis, the low land price (compared to analogous agricultural regions in the European Union), long farming traditions and increasing efficiency allow expecting the increase of both rental income and land price.

The real estate investment company should be established on the basis of the currently operating company Invaldos Nekilnojamojo Turto Fondas, AB. At the present Invalda LT group owns commercial real estate objects in Lithuania with the total area of 50 thousand square meters.

“We think that the location of our object is very good. They generate stable cash flow and most of them have a potential of value increase through the development. One of our priorities is the maximization of cash flow from our property. Also, upon the economic rationale, we intend to allocate funds for the renovation of the owned objects or for the acquisition of the new ones”, - Mr. Sulnis said.

The first investment of the IT investment company would be 80 % of shares in BAIP Group. This group currently owns companies in Lithuania, Norway and Tanzania. Moreover, it has implemented projects in more than 50 countries.

“Lithuania is the exporter of the IT services. Many start-up and mature companies' business models are suitable for the international markets and growth of value”. - Mr. Sulnis, said.

Invalda LT, AB will concentrate on asset management business and will seek to receive the main income from the management activity.

The implementation of the planned asset management changes will depend on the decisions of the Shareholders Meeting and the Bank of Lithuania. Therefore, there is a possibility that the reorganisation of a part of it may not happen or the structure of the proposed reorganisation may change.