Nordeka and Liepajas Autobusu Parks become a single market participant
Shareholder of JSC Nordeka (Nordeka) and the private shareholder of JSC Liepājas Autobusu Parks (LAP) have decided to establish a company group under a united management team, receiving a positive announcement by the Competition Council regarding this move.
The aim of the Group is to increase competitiveness and promote closer cooperation in providing quality services in passenger transport.
The establishment of the Group will allow passenger transport carriers to work more efficiently and compete not only in Latvia, but also in export markets. As part of the agreement, both companies entrust operational management to one management team determined and implemented by MBO Invest Ltd..
MBO Invest has finished the process of buyout ("Management Buyout") in Nordeka, becoming its 100% shareholder. Now, as the next planned step, receiving the consent from the Competition Council, is the creation of a unified management group with other market participants.
A single management means better competitiveness in the domestic market, more opportunities and services of export markets starting with the Baltic States.
Why the Latvian Passenger Transport Market is required.
The ability of national capital companies to compete at both locally and in the region is limited. For small companies in public procurement, it is challenging to offer a competitive price, disadvantageous to buy fuel, difficult to get appropriate discounts from bus manufacturers. There is a limited opportunity to create motivating employee remuneration policy. The Group is an effective and quick way to increase competitiveness, reduce fragmentation on the market. Nordeka and LAP are the first, but certainly not the only companies, whose shareholders have evaluated various forms of cooperation and merger. Others will definitely follow.
What will happen
Management and structural changes and adjustments are planned to grow in the operation of all companies in the Group. More intensive and accurate information exchange is planned, and with it – quality support where it is needed the most.
The Group will work on the efficiency of all processes, including: uniform accounting systems, centralized fleet service, uniform fuel purchases, a unified dispatcher service, resulting in greater convenience of passengers and becoming a recognized partner for customers.
Employees will continue to work in their respective companies, and all contractual obligations undertaken by the two companies remain in force.