Government decides to increase INVEGA’s authorised capital to EUR 53 million

Government decides to increase INVEGA’s authorised capital to EUR 53 million

On Wednesday, the Lithuanian Government adopted a decision to increase the authorised capital of the national promotional institution Investment and Business Guarantees (lith.UAB “Investicijų ir verslo garantijos” -INVEGA) by EUR 45.4 million, from EUR 8 million to EUR 53.4 million. This step was taken as part of the consolidation of the national promotional institutions Public Investment Development Agency UAB (lith. UAB “Viešųjų investicijų plėtros agentūra“ - VIPA), State Investment Management Agency UAB (lith. UAB “Valstybės investicijų valdymo agentūra“ - VIVA), and Agricultural Loan Guarantee Fund UAB (lith. UAB “Žemės ūkio paskolų garantijų fondas“ - ŽŪPGF) on the basis of INVEGA. The capital of the new structure is increased by taking into account the value of all the undertakings to be merged.

INVEGA CEO Kęstutis Motiejūnas: ‘The formation of a group of companies, i.e. the increase of INVEGA’s capital by means of an asset contribution in the form of shares in other companies, completes one of the most important stages of consolidation. The significantly increased capital of the consolidated national development institution will allow us to attract more private funds, increase investor confidence and at the same time allow us to offer more investments to different sectors of the economy.’

The significantly higher capital of the consolidated national development institution will allow the attraction of more private funds, increase investor confidence and at the same time allow more offers of investments to different sectors of the economy.

He said that the merger of the companies was foreseen in the government’s programme. It was aimed at eliminating the duplication and fragmentation of the state’s incentive financing measures and concentrating financial resources more effectively on those areas where public investment was most needed.

‘For the time being, all activities of the consolidated companies will continue as normal, while the obligations of the merged companies to customers and partners will remain and all services will continue. At the end of this year and early next year, the reorganisation will gain momentum with the full integration of the Agricultural Loan Guarantee Fund (lith. ŽŪPGF) into INVEGA and the transfer of some of VIVA’s functions and staff. This will be followed by the transfer of VIPA’s activities’, Motiejūnas added.

The objectives and scope of the consolidated company will be broad – targeted investments in areas of national importance, improvement of the business environment, sustainable financing and promotion of the capital market through innovative financial instruments. The establishment of a green finance institute and development cooperation projects are being considered, and the aim will be to retain most of the staff, using their existing experience and focusing on strengthening their competences.

Motiejūnas ‘INVEGA, which will operate on the one-stop shop principle in the future, will aim to actively contribute to the economic and social progress of the country and the development of Lithuanian business in international markets. Until now, the national promotional institutions that have operated separately have had different operational strategies, funding sources and management structures, although technically they have operated in a similar way and offered similar financial services. Logically, bringing all this together in one place – one institution – would allow better use of the strengths and competences of all of them. The practice of other EU countries also shows that it is better to have one strong state financial assistance entity than several different ones, and it is much more convenient for business and other sectors to work with one development institution’.

The practice in other EU countries shows that one strong public financial assistance entity is better than several different ones, and that businesses and other sectors are much more comfortable working with one development body.

The model chosen for the consolidation is to merge other national promotional institutions as subsidiaries into INVEGA. This will ensure the continuity of the existing financial instruments, while simplifying and speeding up the restructuring process.

The consolidation is expected to be completed next year.