Continuing its work on exiting the round timber processing business, SIA “Rīgas meži” invites potential bidders to submit proposals regarding the draft documentation for the planned procurement of “Services for organizing the attraction of an investor and the sale of the ‘Norupe’ sawmill”.

The purpose of these discussions, or consultations with potential suppliers, is to ensure maximum competition, identify the current market situation, and determine reasonable requirements in order to prepare the highest quality procurement documentation and launch the public tender.

The result of the planned procurement is to find a consultant who will attract an investor and organize the sale of the “Norupe” sawmill. The tender is planned to be announced in March 2023.

The public notice regarding the discussion is published on the Procurement Monitoring Bureau website: https://ej.uz/8rgm. Please submit proposals by 17:00 on Thursday, 16 February 2023, by sending them to the email address: iepirkumi@rigasmezi.lv.

“Rīgas meži” is continuing its work on exiting the round timber processing business in accordance with the instructions of the State Audit Office and the Competition Council, as well as the decisions of the Riga City Council and the company’s board, with the main goal being the prevention of market and competition distortion. The company is paying special attention to ensuring that the preparation and adoption of decisions are based on the principles of good governance, legality, transparency, and calculation. Furthermore, it is essential for the company to care for the interests of the sawmill's employees.

At the end of 2022, the previous stage on the path to exiting the round timber processing business was concluded. Specifically, after evaluating possible exit methods and their compliance with the demand and interests of potential investors, the following scenarios were deemed most advantageous for the company:

• sale of the sawmill business (the aggregate of all assets and liabilities),

• investing the sawmill business into the share capital of a new company and subsequent sale of capital shares, or

• sale of the sawmill's assets, to be implemented if no suitable offers for the sale of the sawmill business and capital shares are received following a thorough investor selection and outreach process.

Taking these scenarios into account, the next stage currently being worked on involves finding the most suitable potential investor and organizing the sale process.

“Rīgas meži’s” structural unit – the “Norupe” sawmill – was established ten years ago, with an investment of more than ten million euros. The equipment is in working order, but significant investments and raw materials are needed to modernize it and increase productivity. Estimates show that even if the company were theoretically to purchase new equipment, the sawmill would continue to stagnate if it remained part of “Rīgas meži” because:

• The company’s strategic goal and amendments to the “Forest Management Plan” approved by the Riga City Council in 2021 dictate a significant reduction in the volume of timber harvesting, focusing more attention on the protection and development of recreational areas and biodiversity;

• in accordance with the State Administration Structure Law, the company is permitted to process only the round timber obtained from territories it owns or manages.