In  compliance  with  JSC  "Latvijas  balzams"  and  JSC  "Rigas  vini"

Management  Board  decision  and signed draft regarding merger project,

work group has been formed.

The  Manager  of  this  work group is General Director of JSC "Latvijas

balzams  Aleksandrs  Ivanovs.  In  the  formation  stage  of  alcoholic

beverages  divission  JSC  balzams  "  has become owner of 83,9% of JSC

"Rigas vini" shares, taking over

50,5%  of  shares  from JSC "AVE LA GRUPA" and acquiring block of 33,4%

shares.

Therefore  JSC  "Latvijas  balzams"  has become also shareholder of SIA

"Bravo"  (  one of largest sellers of alcoholic beverages) and owner of

54%  of JSC "Rigas alus" (company specialises in production of beer and

refreshing  drinks).  Next step of merger - uniting of trade systems of

SIA "Latvijas balzams -

tirdznieciba"  and SIA "Bravo" under "Bravo" name has been carried out.

New  trade  system will unite 40 stores and 10 warehouses. The director

is Henrijs Fogelis.

JSC  "Latvijas  balzams"  has  signed  long  term  agreement  with  JSC

"Hansabanka"  regarding  loan  of  USD  5  million  and  JSC "Unibanka"

regarding USD 5 million and LVL 2,5 million. This loan will be used for

acquiring   block   of   JSC   "Rigas  vini"  shares,  development  and

implementation of newly formed alcohol trade system.