Joint Stock Company Eco Baltia

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Joint Stock Company Eco Baltia Joint Stock Company Eco Baltia a joint stock company, having its registered office at Darza iela 2, Riga, Latvia and registered with the Commercial Register of the Republic of Latvia under number 40103446506 Offering of up to 12,558,000 Shares, with a nominal value of LVL 1.00 each, and admission to trading on the Warsaw Stock Exchange and the Riga Stock Exchange of up to 28,704,000 Shares of Joint Stock Company Eco Baltia This document (the “Prospectus”) has been prepared for the purpose of (i) the offering (the “Offering”) of up to 12,558,000 bearer shares in the share capital, with a nominal value of LVL 1.00 each, in Joint Stock Company Eco Baltia (the “Issuer” or the “Company”), and (ii) the admission of up to 28,704,000 bearer shares of the Issuer (the “Shares”) to trading on the Warsaw Stock Exchange (Giełda Papierów Wartościowych w Warszawie S.A., the “WSE”) and the Riga Stock Exchange (NASDAQ OMX Riga, the “RSE”). The Issuer will be offering for subscription up to 6,279,000 newly issued Shares (the “New Shares”). Otrais Eko Fonds (the “Selling Shareholder”), the Issuer’s minority shareholder, will be offering up to 6,279,000 existing Shares (the “Sale Shares”). The New Shares to be issued by the Issuer and the Sale Shares offered by the Selling Shareholder are referred to, where the context permits, as the offer shares (the “Offer Shares”). The Issuer will only receive the net proceeds from the sale of the New Shares, whereas the Selling Shareholder will receive the net proceeds from the sale of its respective Sale Shares. The Offer Shares offered in this Offering constitute a minority interest in the Issuer. Prior to the completion of the Offering, the Selling Shareholder holds 28% of the issued share capital of the Issuer. The Offering consists of: (i) public offering to retail investors in Poland (the “Retail Investors”), (ii) public offering to institutional investors in Poland (the “Polish Institutional Investors”) and (iii) private placement to institutional investors in certain jurisdictions outside the United States and Poland in reliance on Regulation S under the U.S. Securities Act (the “International Investors”, and together with the Polish Institutional Investors, the “Institutional Investors”), in each case in accordance with applicable securities laws. The Offer Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the “US Securities Act”), or under any securities laws of any state or other jurisdiction of the United States. The Offer Shares are being offered and sold only outside the United States in offshore transactions in reliance on Regulation S under the US Securities Act (“Regulation S”) and may not be offered or sold within the United States or to, or for the account or benefit of, US persons (as defined in Regulation S) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act (see "Selling Restrictions"). The Offer Shares are being offered, as specified in this Prospectus, subject to cancellation or modification of the Offering and subject to certain other conditions. This Prospectus constitutes a prospectus for the purposes of Article 3 of European Union (EU) Directive 2003/71/EC (the “Prospectus Directive”) and has been prepared in accordance with the Financial Instrument Market Law of the Republic of Latvia, dated 20 November 2003 (the “Latvian Financial Instrument Market Law”). The Latvian Financial and Capital Market Commission (Finanšu un kapitāla tirgus komisija, the “FKTK”) in its capacity as the competent authority in Latvia under the Latvian Financial Instrument Market Law, has approved this document as a prospectus. The Issuer has requested that the FKTK provide the competent authority in Poland, Polish Financial Supervision Authority (Komisja Nadzoru Finansowego, the “PFSA”) with a certificate of approval attesting that this Prospectus has been drawn up in accordance with the Prospectus Directive. The Issuer will be authorised to carry out the Offering to the public in Poland, once the FKTK has provided the PFSA with a certificate of approval of this Prospectus and after the Prospectus has been made available to the public together with a translation of the summary into the Polish language. See "Risk Factors" for a discussion of certain considerations to be taken into account when deciding whether to invest in the Offer Shares. Prior to the Offering, there was no public market for the Shares. Based on this Prospectus, the Issuer intends to apply for up to 28,704,000 Shares, including the Offer Shares, to be admitted to listing and trading on the main market of the WSE and the main market (list) of the RSE (the “Admission”). The Issuer expects that trading in the Shares on the WSE and the RSE will commence in on or about 16 July 2012 (the “Listing Date”). Settlement of the Offering is expected to occur on or about 12 July 2012 (the “Settlement Date”). Prospective Retail and Institutional Investors may subscribe for or purchase the Offer Shares during a period which is expected to commence on or about 29 June 2012 and is expected to end on or about 4 July 2012 (the “Subscription Period”). The final offer price per one Offer Share denominated in PLN (the "Offer Price"), the final number of the Offer Shares, and the final number of Offer Shares allocated to each tranche will be determined by the Issuer and the Selling Shareholder, acting jointly, upon recommendation of the Offering Broker after completion of book- building process for Institutional Investors and prior to commencement of the subscription period in the retail and institutional tranche no later than on or about 29 June 2012 (by 9:00 am CET) and will, in accordance with Art. 17.7 and 21.4 of the Latvian Financial Instrument Market Law and Art. 54 of the Polish Public Offerings Act, be filed with the FKTK and PFSA and published on the websites of the Issuer (www.ecobaltia.lv) and the Offering Broker (www.dmbzwbk.pl), otherwise in accordance with applicable Latvian and Polish regulations. The Shares of the Company are bearer shares and are registered with the Latvian Central Depository (Latvijas Centrālais Depozitārijs, the “LCD“) under ISIN code LV0000101350. The delivery of the Offer Shares will be made through the book-entry facilities by transferring them from the LCD to the Polish clearing and settlement institution – the National Depository for Securities (Krajowy Depozyt Papierów Wartościowych S.A., the “NDS”). Shareholders in the Issuer may hold the Shares through the NDS and/or LCD participants, such as investment firms and custodian banks operating in Poland and/or Latvia. Offer Price: To be determined in PLN and announced no later than on or about 29 June 2012 BIC Securities SIA is the financial advisor (the “Financial Advisor”) and Bank Zachodni WBK S.A. is the capital advisor (the “Capital Advisor”) of the Issuer. AS SEB Enskilda is the sales agent (the “Sales Agent”). Dom Maklerski BZ WBK S.A. is the global co-ordinator and sole bookrunner (the “Global Coordinator”), and the offering broker in Poland for the purposes of the Offering and Admission of the Shares on the WSE (“Offering Broker”). Financial Advisor Capital Advisor Global Coordinator and Offering Broker Sales Agent The date of this Prospectus is 18 June 2012 TABLE OF CONTENTS SUMMARY 3 PERSONS RESPONSIBLE 11 RISK FACTORS 12 EXCHANGE RATES 32 USE OF PROCEEDS 33 DIVIDENDS AND DIVIDEND POLICY 34 CAPITALISATION AND INDEBTEDNESS 35 SELECTED HISTORICAL FINANCIAL INFORMATION 37 OPERATING AND FINANCIAL REVIEW 41 PRO FORMA FINANCIAL INFORMATION 77 INDUSTRY OVERVIEW 82 REGULATORY INFORMATION 96 GENERAL INFORMATION ON THE ISSUER 101 GROUP STRUCTURE 103 BUSINESS OVERVIEW 109 MATERIAL CONTRACTS 131 RELATED PARTY TRANSACTIONS 138 MANAGEMENT AND CORPORATE GOVERNANCE 141 SHAREHOLDERS 152 DESCRIPTION OF THE SHARES AND CORPORATE RIGHTS AND OBLIGATIONS 155 CERTAIN LATVIAN AND POLISH SECURITIES MARKET REGULATIONS AND PROCEDURES, THE WARSAW STOCK EXCHANGE AND THE RIGA STOCK EXCHANGE 163 THE OFFERING AND PLAN OF DISTRIBUTION 168 PLACING 178 SELLING RESTRICTIONS 180 TAXATION 184 INDEPENDENT AUDITORS 189 ADDITIONAL INFORMATION 190 FINANCIAL INFORMATION F-1 ANNEX I DEFINED TERMS A-1 2 SUMMARY The following constitutes the summary of the essential characteristics and risks associated with the Issuer, the Group and the Offer Shares. This summary is not exhaustive, does not contain all information of importance to prospective investors, is not a substitute for reading the entre Prospectus and must be read as an introduction to this Prospectus. Prospective investors should read this Prospectus thoroughly and completely, including the "Risk Factors", any supplements to this Prospectus required under applicable laws and the Consolidated Financial Statements, the Condensed Consolidated Interim Financial Statements, the Pro Forma Financial Information and other financial information and related notes, before making any decision with respect to investing in the Offer Shares. No civil liability will attach to the Issuer and other companies of the Group in respect of this summary (including the Summary Financial and Operating Information) or any translation thereof, unless it is misleading, inaccurate or inconsistent when read together with the other parts of this Prospectus. Where a claim relating to the information contained in this Prospectus is brought before a court in a Member State, the plaintiff may, under the national legislation of the Member State where the claim is brought, be required to bear the costs of translating this Prospectus before the legal proceedings are initiated. Summary of the Business The Group is the largest vertically integrated multi-service waste management group in the Baltics in terms of turnover, consisting of companies that operate in four different waste management segments, providing wide variety of services, starting from (i) organisation of waste recovery, (ii) waste collection, (iii) recyclables sorting and trading, and finally (iv) recycling.
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