€46 million in debt for Latvijas Balzams: how billionaire Yuri Shefler, through Amber Beverage Group, drove the producer of Riga Black Balsam into a financial pit

€46 million in debt for Latvijas Balzams: how billionaire Yuri Shefler, through Amber Beverage Group, drove the producer of Riga Black Balsam into a financial pit

Latvijas Balzams published its first-quarter report, and the numbers look like a death sentence: revenue fell by 30%, sales dropped by 36%, tax debt reached €46.4 million, and the company lost another 50 employees over the year.

90% of Latvijas Balzams is owned by Yuri Shefler’s Amber Beverage Group (ABG). It was the holding company that delivered the blow: the enterprise lent €143 million (75% of all its assets) to its parent and affiliated structures.

Virtually all key assets, including the Riga Black Balsam brand, are pledged as collateral against the holding company’s debts. In April, a Luxembourg court opened reorganization proceedings against ABG, and banks and bondholders are now making claims for which Latvijas Balzams is liable as the pledgor.

Shefler’s closest associate, Pyotr Aven, is under sanctions. Latvijas Balzams is unlikely to survive in its current form. The Riga Black Balsam brand will almost inevitably pass to creditors or a new owner.