Milder: Shareholders support Baltika’s new direction
In order to carry out the strategic turnaround of the company, the shareholders of Baltika adopted the decision at the Annual General Meeting held today to increase the share capital by five million euros by public offering. “I am pleased that the shareholders support Baltika’s vigorous and courageous plan for the coming years, focusing on simplifying business processes and reducing operating costs. I think this is the best plan to reach a profit,” said Meelis Milder, Chairman of the Board and shareholder of Baltika.
In order to bring the company’s equity into line with the requirements of the Commercial Code, it was decided to increase the nominal value of the share to one euro and to exchange the existing shares so that one new share is received for every ten shares. As a second decision, the nominal value of the share was reduced to EUR 100,000 and the total share capital decreased from EUR 4,000,000 to EUR 400,000. “I point out that the nominal value of the shares is being changed. The market price of the shares will still be formed from trading on the securities market,” noted Milder.
In addition, a decision was made to increase the share capital for restructuring by five million euros through public offering. “For this purpose, we plan to have an issue of shares in August, where all shareholders have the opportunity to participate. As a listed issuer, Baltika cannot give recommendations on the sale or purchase of shares, but I can say that the company is undoubtedly interested in having as many shareholders as possible in a public offering,” he said.
Milder added that Baltika’s major shareholder, KJK Fund, Sicav-SIF, owning 38.9% of the shares, has already confirmed its willingness to subscribe for new shares in proportion to its holding and to the order specified in the terms of the issue up to EUR 5,000,000 depending on the exercise of other participants’ subscription rights.
Last month, Baltika informed the stock exchange about its business and financing plan for the coming years, which, according to the head of the company, is the most radical step in Baltika’s history. Instead of international growth, Baltika will focus on further sales in the Baltic countries, simplifying business processes and reducing operating costs. Cost savings are due to discontinuation of production in Estonian production units, merging of brands and termination of several loss-making activities, which also means not continuing cooperation with Russian franchise partner.
The turnaround of the company will be implemented with the help of Mae Hansen, global manager, who has joined the board of Baltika. “Strategic changes have begun well. With the transition to an optimized brand portfolio, a significant simplification of business processes and the completion of production in Estonia the company plans to reduce its annual fixed costs by nearly two million euros over the next 12 months,” said Hansen.