CORRECTION: Clarification on Indirect Changes in the Ownership Structure of the DelfinGroup’s Shareholder
Correction: Clarification to paragraph 9 has been supplemented and paragraphs 10, 11 and 12 have been added summarising the conditions for retained control with a detailed list in the Annex.
Riga, 2021-07-15 13:26 CEST --
At the end of April of this year, changes were made in the ownership structure of SIA L24 Finance, a shareholder of AS DelfinGroup, which are registered in the Register of Enterprises of the Republic of Latvia. The Kesenfelds family’s company SIA ALI Investments has become indirect shareholder of SIA L24 finance. However, no changes have been made in the rest of the DelfinGroup’s shareholder structure. The Chair of the supervisory board and the company's largest shareholder Agris Evertovskis controls the company through SIA EC finance and SIA AE consulting, as well as 3.5% of the company is still owned by the DelfinGroup’s management team – the management board members. On 6 May in the Register of Enterprises of the Republic of Latvia are registered changes in the way how A. Evertovskis is exercising control in the AS DelfinGroup.
Agris Evertovskis, the Chair of the supervisory board of AS DelfinGroup: "In March we announced the plans of DelfinGroup to make an initial public offering (IPO) on the Nasdaq Riga stock exchange, and we are currently experiencing growing interest from potential investors. The Kesenfelds family has been successfully operating in the FinTech industry for a long time. Therefore, the presence of such stable and experienced long-term shareholders in times of significant development of company will definitely add value. Our vision for the expansion of the business coincides, and I am pleased that they have shown confidence and are a part of the future growth story of DelfinGroup. The changes that have taken place do not change anything in the current management of the company, and we continue working to implement the planned long-term growth strategy of DelfinGroup."
Aigars Kesenfelds, the Co-Owner of SIA ALI Investments: "AS DelfinGroup is a very promising company with good and stable financial results, modern corporate governance. The company operates in a promising market segment, and therefore we made this long-term financial investment in a steadily-growing and dividend-paying company. So far, the family businesses I oversee have invested in a number of non-bank lending and FinTech companies. They operate in different parts of the world, and this has helped in gaining valuable international experience in this field. DelfinGroup has a convincing business strategy, and the company is actively working to become a public joint-stock company in the second half of this year, raising additional capital, which will open even broader growth opportunities for the company. SIA ALI Investments will not get actively involved in the management of the company, therefore no changes in the management or strategy of AS DelfinGroup initiated by us are expected. I have full confidence in the existing management board of the company and also in the newly elected supervisory board with independent board members who equally represent the interests of all shareholders in accordance with the best international corporate governance practice."
The Kesenfelds family company has also been a long-term financial investor in AS MADARA Cosmetics, which made a successful IPO on Nasdaq First North several years ago. The new shareholder, therefore, fully supports the decision of DelfinGroup to make an IPO, as it believes in the potential of the financial markets and considers the planned IPO to be an effective way to raise capital for the implementation of the DelfinGroup’s long-term development strategy. The management board and the supervisory board of the AS DelfinGroup also remain unchanged.
The shareholders of SIA ALI Investments are Aigars Kesenfelds, Linda Kesenfelde and Ivars Kesenfelds.
The transaction amount and other details on the transaction are not disclosed. The largest shareholder of DelfinGroup, Chair of the supervisory board and founder A. Evertovskis continues owning 31.31% of the DelfinGroup’s shares through EC finance and AE consulting. Changes in the shareholder ownership structure do not affect the operations of DelfinGroup, nor the control of the company, nor the beneficial owner of the company, which continues to be A. Evertovskis.
The changes respect the Issue Terms of notes ISIN LV0000802213, ISIN LV0000802379 and ISIN LV0000802429.
By exercising their right under Section 3, Paragraph seven of the Group of Companies Law, AE Consulting and EC finance as the controlling entities have informed the Register of Enterprises of the Republic of Latvia that they have a decisive influence over the dependent company AS DelfinGroup based on participation under Section 3, Paragraph three, Clause 2 of the Group of Companies Law.
Meaning that SIA AE Consulting and SIA EC finance as shareholders of the company have the right to appoint or remove the majority of members of the company's management or supervisory body (including A. Evertovskis has the right to be elected to the company's supervisory board or management board at his discretion). The above rights arise from the company’s shareholders agreement of 26 April 2021, concluded between SIA AE Consulting, SIA EC finance, SIA L24 Finance and Agris Evertovskis.
The above-mentioned shareholders’ agreement also stipulates situations, when SIA AE Consulting and SIA EC finance may lose the rights to appoint or remove a majority of members of the company's management or supervisory body (including the right of Agris Evertovskis at his discretion to be elected to the supervisory board or management board) and lose control in the supervisory board of the company. A list of these situations is provided in the Annex to this clarification.
According to the above-mentioned shareholders’ agreement, SIA L24 Finance has the right to nominate one representative to be elected to the supervisory board of the company, but SIA AE Consulting and SIA EC finance has the responsibility to vote at the shareholders’ meeting in the way to provide that the nominated representative of SIA L24 Finance is elected to the supervisory board. Currently SIA L24 Finance has not exercised the above mentioned right.
Pursuant to the above-mentioned company’s shareholders’ agreement, if a representative nominated by SIA L24 Finance had been elected to the supervisory board of the company, the decision of the supervisory board of the company to approve the decision of the management board of the company regarding issues mentioned in Articles 6.7.1, 6.7.8 - 6.7.12 (if the amount exceeds or may exceed EUR 500,000), 6.7.13, 6.7.15 or 6.7.16 of the Articles of Association (if any of the above-mentioned issues referred to in the Articles of Association relates to the subsidiary of the company) would only count as approved if the representative of SIA L24 Finance would have also voted “for” at the meeting of the supervisory board.
On 23 March, AS DelfinGroup announced its intention to launch an initial public offering (IPO) of its shares on the Nasdaq Riga stock exchange in 2021. To follow up this event, please subscribe for news alerts: https://www.delfingroup.lv/invest.
AS DelfinGroup is a licensed financial service company founded in 2009 and represents the brands Banknote, VIZIA and Rīgas pilsētas lombards (Riga City Pawnshop). The company employs 277 professionals in 92 branches operating in 38 Latvian cities. AS DelfinGroup is a member of the Latvian Chamber of Commerce and Industry and the Latvian Association of Alternative Financial Services and has received the Gold Level status of the State Revenue Service cooperation programme. The Group's core services are the sale of pre-owned goods in branches and on the internet, a pawn loan, a consumer loan, as well as a loan specifically tailored to people at retirement age. DelfinGroup bonds are listed on the Nasdaq Riga First North bond list. In 2020, the company's revenue was 23.7 million euros, the loan portfolio reached 34.7 million euros, EBITDA increased to 9.3 million euros and profit before taxes reached 4.6 million euros. The Company's estimated taxes for 2020 are 3.42 million euros.
Information was prepared by:
Member of the management board of AS DelfinGroup