Baltika: creditors support business activities continuity
„Majority of the creditors approved Baltika’s reorganization plan. We are happy to note that creditors support the company that has long history and that has given notably contribution to Estonian economy and fashion industry,“ said Baltika’s Board Member Mae Leyrer.
„Banks and investors have already shown their support regarding possible additional financing and now we have also the support of the creditors. Successful reorganization enables continuity of Baltika and Baltika Group business activities and saves numerous jobs in Estonia, Latvia and Lithuania,“ added Leyrer.
Baltika’s temporary payment difficulties, that led to reorganization, are caused by COVID-19 crises which resulted in drastic clothing sales drop and inability to meet contractual obligations related to production activities exit.
“Our collaboration partners understood the importance of surviving these difficult times together and helped to save hundreds of jobs. We are very grateful for that,“ said Baltika CEO Flavio Perini.
According to Perini, Management Board is actively engaging in radical turnaround of the company focusing more and more on innovation and digitalization. “Our products need to offer the best to our existing and potential new customers. In parallel, we need to upgrade the processes. We want to be bold and innovative with our products and daily business activities,” added he.
Baltika’s reorganization’s purpose is to overcome temporary payment difficulties and liquidity problems. By May 20th, creditors had to support the reorganization plan with at least 50% of the creditors count and at least 2/3rd of the debt in both groups voting for it. Final approval decision is made by the court. Baltika will present the reorganization plan to the court latest on May 25th.
Baltika is biggest fashion design company in Baltics with 79 shops and 495 employees. In normal market conditions, Baltika shops in the home markets receive annually over 7,7 million visits and 850,000 purchases.
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