The  strategic  development plan of Staburadze, as declared previously,

envisages   acquisition   of   companies  in  related  businesses.  The

rationelle  behind  the  indirect  acquisition  of 73.2% in Laima is to

benefit  from  synergies.  The  two  companies  will  be  merged  on  a

step-by-step  basis  in  three  phases:  merging  on the administration

level,  a legal merger and merging the production sites. It is expected

that  the  acquisition  will  allow to significantly cut administration

costs  related  to  procurement  of  inputs,  as well as to enhance the

export activities of both companies, especially those of Staburadze.

The  merging  of administrations is likely to be finalised by mid 2002,

to  be  followed  by  legal merger. The merging of the production sites

under  one roof is expected to bring the largest returns. It is planned

that  a  new  production  building  will be built specifically for this

purpose in compliance with the European standards.

A  working group will be set up from top management and experts of both

companies, besides.  Staburadze is also considering an invitation of an

international  consulting  company  to assist in the process, which may

start already this week.

According to the company, the deal could pay back in 5-6 years. All the

plans  are  related  to long-term development. As reported earlier, the

transaction was financed by two banks: the local bank Rietumu Banka and

an  Icelandic  bank  Islandsbanki  FBA  hf. Staburadze has paid for the

shares of NTDBC L and has registered the title at the Company Register.

As  a  collateral,  Staburadze has pledged its assets and the shares of

Laima  acquired  in  the deal. Staburadze does not intend to pledge the

assets of Laima.

At  the present moment Staburadze is not able to assess all the options

for  cutting  costs  in  the  long-term. Yet, even the least optimistic

scenario,  which  includes  savings  on  procurement  of  inputs  and a

rational  utilisation of technical capacities, will allow to save up to

one million dollars per year.

The  deal will not have a significant impact on the existing investment

plan of Staburadze.

By  the  end of 2001 Staburadze has to repay about half of the loan. In

the  first  half  of  the  year  the  financing  of the loan will be as

follows:  the cash-flow for 2001 has been prepared, which will serve as

a  source  for  loan  repayment.  It  envisages  additional  sources of

funding.  For  the  time being, Staburadze cannot specify the source of

potential  investment,  since  no  final  agreement has been reached. A

public  offering  of  shares  has  been mentioned among the options for

raising capital.

     The  annual  shareholders  general  meeting,  which  took place on

January 12,

2001, resolved on the following:

1.  Acquisition  of "NOI Baltija" shares: the meeting has approved that

the Management Board had the right to exceed the limits of the budget.

2.  Acquisition  of "NTBDC L" shares: the meeting has approved that the

Management Board had the right to exceed the limits of the budget.

3. Changes in the Supervisory Boad and the Management Board:

The  former  members  of  supervisory  Board  -  Arnolds Laksa, Tryggvi

Hallvardsson, Zenon Olbrys and Druvis Skulte will be replaced by Finnur

Geirsson,  Kristinn  Bjornsson,  Jeļena  Popova  and Irēna Krūmane. The

former Management Board members Juris Jonaitis (remains Chairman of the

Board) and Rita Veide were re-elected;

Juris Vīksna was replaced by Liene Grūtupa; Ingrīda Rone was elected as

a Member candidate.