The leading Baltic hygiene producer iCotton in cooperation with Signet Bank issues EUR 20 million bond

Baltic hygiene products manufacturer iCotton in cooperation with Signet Bank has completed a EUR 20 million secured bond issue. The bonds were offered to investors in a private placement and are expected to be listed on the Nasdaq Riga First North alternative market in the near future.

The proceeds from the bond issue will be used to refinance iCotton Group’s bank liabilities in Latvia and Poland. The refinancing of bank loans that have amortization schedules with bonds, that are repayable at maturity, enables the Group to obtain additional working capital financing to further expand its business without increasing its total liabilities. The bond issue attracted significant investor interest, with more than 70 private and institutional investors participating, most of them from the Baltic States. Demand from institutional investors, mainly investment funds, pension plans and banks, accounted for about half of the total demand for the bonds, with retail investors accounting for the other half.

Since the establishment of iCotton in 2011, significant investments have been made both in production facilities and new product development, as well in acquisition of majority stake in Harper Hygienics, a company listed on the Warsaw Stock Exchange, thus becoming a leading player not only in the Baltics but also on the Polish market. At its production sites in Liepaja and Poland, iCotton manufactures and markets a wide range of products – cotton pads, cotton buds, wet and dry wipes, absorbent pads and feminine hygiene products – under its own and private labels, for both domestic and export markets. The Group’s most important brands are Cleanic (beauty and hygiene products), Presto (household products) and Kindii (baby hygiene products). Sustainability is a particular focus and, thanks to its vertically integrated production process and previous investments in product research, in 2022 the Group also introduced innovative eco-friendly product categories made from hemp and flax fibre.

The Group’s growth is based on strong fundamentals – a successful business model, globally demanded products and a continuously growing market for hygiene products. We meet the growing demand for hygiene products with modern, highly automated production facilities in Liepaja and Poland, which allow us to respond quickly and efficiently to market demand trends. In addition, our selected product groups are high quality products that are well-known and in demand both in Europe and other regions of the world. The consumption of hygiene products continues to grow in all regions of the world, and we see great potential for further business growth with the help of the bond financing.

Jānis Bormanis, Member of the Supervisory Board of iCotton

We are pleased to have the opportunity to introduce the Baltic capital market to the iCotton Group, one of the industry leaders in Eastern Europe and one of the few manufacturing companies in the Baltics that uses capital market financing, thereby expanding the range of investment opportunities available to Baltic investors. The Group’s ability to transform and successfully overcome the challenges experienced in recent years is a testament to the strength of its business model and the strong and stable demand for the Group’s products, which was also appreciated by investors who subscribed to the bonds.

Kristiāna Janvare, Head of Investment Banking at Signet Bank

About iCotton:
SIA iCotton is a Latvian manufacturing company founded in 2011 in Liepāja and has become a leading Baltic manufacturer of cotton and hygiene products. iCotton Group also includes the Polish company Harper Hygienics. The group produces a wide range of products – cotton buds, absorbent pads, wet wipes, feminine hygiene products. The group’s main brands are Cleanic (beauty and hygiene products), Kindii (baby products) and Presto (household cleaning products), which are particularly well-known on the Polish market. The Group has production facilities in Liepaja with 9 000 m2 and 11 production lines, and in Warsaw, Poland with 13 200 m2 and 44 production lines. iCotton Group will have a turnover of more than EUR 70 million in 2023, 45% domestic (Baltic, Polish market) and 55% EU and non-EU export market.

About Signet Bank:
Signet Bank was founded in 1991 and is one of Latvia’s first independent banks. The bank’s strategy focuses on providing financing and capital management services to local entrepreneurs and their businesses. Since the start of 2021, Signet Bank has provided customers with almost EUR 500 million of financing in the form of loans and bonds. Signet Bank’s shareholders are nine Latvian and international private investors, of whom the biggest is Signet Acquisition III (25%), whose sole shareholder is US investor Aleksandrs Solovejs; AS RIT Group (19.50 %), a Latvian company owned by the Rapoport family, and SIA Reglink (15.93 %), founded by banker Irīna Pīgozne.