Luminor backs Latvian forestry firm Meža Cikls with €4M debt package

What's the deal? Luminor BankDealroom has a profile for this one. Try Dealroom → is providing €4 million in financing to Latvian forestry company Meža Cikls, covering new machinery, working capital, and an increased credit facility. The package includes leasing financing for a forwarder and two harvesters, plus a larger credit line and factoring facility.

What's the endgame? The new equipment lets Meža Cikls carry out all its logging operations with its own machinery. The working capital funds the acquisition and resale of logging sites and timber across Latvia, the Baltic States, and the EU, while supporting export growth in Asian markets.

Why now? Meža Cikls has partnered with Luminor since 2023, using earlier financing to acquire more than 20 machines and vehicles. It has grown its team to 56 employees while competing with established industry leaders. This round marks its next development milestone.

What could go wrong? Latvia's forestry sector has seen significant volatility, driven by inflation, the war in Ukraine, and rising interest rates. Price and demand fluctuations and geopolitical developments continue to weigh on the industry.

The signal: Forestry and wood processing rank among Latvia's most important export sectors. "Long-term growth depends on companies that are able to adapt to market dynamics, expand their operations, and seize new growth opportunities," said Ilze Zoltnere, head of Luminor bank's corporate department in Latvia — a bet on scaleups outmanoeuvring a turbulent market.

Read more: The Baltic Times

Image credit: USDAgov