Apollo Group, owner of the popular Lido restaurant chain, plans to list bonds on the Nasdaq Tallinn Stock Exchange’s Baltic Bond List to bolster its financial position and fund growth initiatives.
The Estonian company, which also operates Apollo cinemas, Vapiano, MySushi, and KFC restaurants, as well as a national bookshop chain in Estonia, announced its intention to issue bonds on February 12th. The move reflects a growing trend of companies in the Baltic region turning to public bond offerings to finance development. This allows investors a direct view into the performance of the businesses they are backing.
According to Andrejs Martinovs, Chairman of the Board at investment management firm INVL, the bond issuance could be an attractive opportunity for local investors, particularly those new to bond investments. “This offering provides the opportunity to receive a fixed income of around 7% on invested funds (taking advantage of investment account benefits), while investors can easily understand the business providing this income – cinemas, restaurants, and other everyday services. It also allows for a practical observation of how the company’s products are performing in the market,” Martinovs explained.
The company’s consolidated revenue reached EUR 227 million in the 2024/25 financial year, a 6% increase of EUR 14 million compared to the previous year. Consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA) rose to EUR 40 million, a 12% year-over-year increase. Apollo Group aims to expand its locations from 170 to approximately 300 over the next five years.
Martinovs noted the investment may be suitable for those who believe in the growth of the Baltic economies and the stability of consumer spending, while acknowledging that a portion of the funds raised could be used to settle existing loans to shareholders. He cautioned, however, that as with any investment, risks should be considered. “Apollo Group consists of several companies, and difficulties in one of them could affect the financial position of the entire group. In this case, the bonds are not secured by specific assets, and the company’s operations could be affected by competition in the entertainment and catering segments. At the same time, Apollo Group has established strict financial and business parameters (covenants) that must be met, and the company is currently meeting them with a margin.” Martinovs suggests a relatively small allocation to this investment – up to approximately 5% of savings.
Voldemārs Strupka, an investment expert at Signet Bank, emphasized the appeal of Baltic bonds as a portfolio diversifier. “For several years, I have liked to diversify portfolios with bonds from the Baltic countries. I believe that investors often overestimate the risks in our region. Yes, Baltic bonds are mostly ‘light high-yield’ segments, but with a relatively stable and often comparatively high quality of companies.” He described Apollo Group’s bonds as a typical medium-yield corporate credit in the Baltics, offering investors a significantly higher coupon than those available in the Eurozone in exchange for lower liquidity and exposure to a cyclical sector.
Strupka highlighted the relatively underdeveloped nature of the entertainment sector in the Baltics, given demographic trends, household consumption levels, and habits. He believes long-term growth will be driven by wage increases, urbanization, and increasing demand for the “experience economy.” The market also remains fragmented, creating opportunities for larger operators to expand.
He also pointed to potential risks, including inflationary pressures, higher energy resource prices, and global stagflation risks, which could lead investors to allocate more of their portfolios to alternative instruments and high-yield bonds. “In this case, the risks are relatively classic – stagflation could negatively affect discretionary consumer spending, which creates cyclical risk in the entertainment sector.” Strupka concluded that, provided the Baltic economy maintains moderate growth and a stagflation scenario does not escalate, Apollo Group, with its stable customer base and diversified entertainment portfolio, could be a relatively attractive option for increasing portfolio returns.
Karīna Kulberga, Head of the Affluent Client Segment at Mintos, founder of the SheOwns financial movement, and host of the weekly podcast “More Money with Karīna Kulberga,” highlighted the fact that the bond issuance is also intended to finance specific development projects in Latvia.
“As an investor from Latvia, I am pleased to spot that the bond issuance is also intended for the construction of the central distribution center of Lido, a brand very well known to us. So new jobs and support for the local economy, while strengthening the brand’s development in the Baltics and Finland,” Kulberga said.
Kulberga also noted that financial analysis is crucial, beyond emotional arguments. “I am pleased to see that Apollo Group’s 26 years of growth have largely been financed by the shareholders themselves, using their own funds, or capital. The company is currently free of external obligations, and these bonds will be the first fixed external debt borrowing. I like this as an investor, because I know that the company is not already burdened with other large obligations, and the new bonds will be subordinated to the first.”
She added that this investment could also serve as a diversification instrument for investors whose portfolios are largely concentrated in foreign markets. “When evaluating my investment portfolio, which is largely concentrated in the US, European and also Asian markets, in the current circumstances of geopolitical tensions, I see that Apollo Group’s markets, the company’s strong balance sheet and the well-structured bond offering can serve as a successful risk diversification solution in my case,” Kulberga stated.
Investors in Latvia can apply to purchase Apollo Group bonds until March 16th. The offering is open to both private and institutional investors throughout the Baltics. The minimum investment and bond nominal value is EUR 500. The bonds have a term of five years and an annual interest rate of 7%. Apollo Group combines cinema, bookstore and restaurant businesses and serves more than one million loyal customers in the Baltics.
