Baltika Board: successful reorganization assures company’s future
Baltika is presenting to creditors reorganization plan, which aims at overcoming temporary payment difficulties and liquidity problems. “Successful reorganization allows Baltika and other Baltika Group companies to continue their business activities and to preserve numerous jobs in Estonia, Latvia and Lithuania. Company’s future is in the hand’s of the creditors, because rejection of the reorganization plan would lead to Baltika’s insolvency,” said Baltika’s departing CEO Mae Leyrer.
According to Leyrer, measures that are used in Baltika’s reorganization plan are compliant with legal and court practices. They are realistic and reasonable and will burden creditors only in the extent that is necessary for reorganization’s success. “Approval of Baltika’s reorganization plan assures creditors’ claims fulfillment in the best possible extent. Baltika’s management counts on creditor’s approval of the plan, so that company could continue business activities and could finalize the successfully kicked-off strategic turnaround,” she added.
Reorganization plan outlines, that major restructuring measures are (a) finishing the successfully started strategic turnaround with the goal of cutting fixed costs, (b) applying applicable COVID-19 aid measures, and (c) attracting additional financing and restructuring creditors’ claims.
Leyrer notes that temporary payment difficulties are caused by sharp sale revenue drop from COVID-19 crises and inability to meet contractual obligations from exiting the unprofitable production activities. “It is difficult for the company to fully meet certain obligations. We are seeking our collaboration partners understanding to jointly work toward the future and to save hundreds of jobs,” she added.
Baltika’s new CEO Flavio Perini confirmed his strong support and commitment to executing the reorganization plan. He stated that: “The reorganization plan is definitely doable and requires now a very strong commitment from all stakeholders, which I strongly believe will be shown as first important step forward.”
For the approval of the reorganization plan creditors will cast their votes in the coming weeks. After creditors voting, court will make the final decision on the reorganization plan’s approval.
Baltika Group is the biggest fashion design company in the Baltics owning 79 shops in Estonia and neighboring countries and providing jobs to 539 people. Under normal conditions customers make 7.7 million visits to and over 850,000 purchases in Baltika’s shops.