As announced on 11 November 2024, AUGA group, AB (hereinafter - the Company), by the decision of the Board, initiates the restructuring process of the Company and convenes an extraordinary general meeting of shareholders, which will be held on 4 December 2024, 10:00 a.m. (hereinafter - the Meeting). In connection with this, the Company publishing a proposed restructuring plan of the Company related with the item 3 of the Agenda of the Meeting "Approval of the Draft Restructuring Plan of the Company", which will be proposed for approval at the Meeting and provides general voting ballot to the shareholders.
The Meeting will also be invited to take a decision to authorize the Board and the CEO of the Company to prepare the accompanying documents and annexes to the draft of restructuring plan of the Company, to coordinate the draft restructuring plan of the Company with the company's creditors, to prepare the final restructuring plan of the Company and to submit it for approval to the general meeting of shareholders of the Company.
"The financial challenges that led up to the initiation of the restructuring process have been shaped by long-term external factors faced by the business, including inflation and rising production costs and the volatility of organic raw material prices. While changes in our operations are now essential to ensure viability and solvency, there are measures already taken earlier that have proved successful and will continue - for example, cost reduction programs, the relinquishment of non-profitable land, and conventional production," says Kestutis Jušcius, Chair of the Board of AUGA group, AB.
The Company, whose primary responsibility is the management of the group's companies and the supervision of their activities, is proposing a 4-year restructuring plan including consolidated, group-focused actions such as:
- Continuation of cost reduction programs which aim to lower consolidated operating costs for the group's companies to €6.5 million by 2027 (compared to €13.9 million in 2023).
- The Company plans to sell some of the entities and/or certain production activities that are distant from the main centres of operations. The Company will seek to sell assets and utilize those which are necessary for its operations under long-term lease agreements.
- Optimization of the core activities that remain central to the businesses the Company manages, including crop growing, dairy, mushroom growing, and FMCG. Each company's operational plan will be reviewed, and a simpler, more cost-efficient management structure will be implemented. Up to 60 companies will be merged or discontinued to reduce management costs. These optimization and efficiency enhancement plans are targeted for completion by 2026.
- Faster implementation of long-developed new businesses, such as biomethane production, which will generate additional cash flow for the group's finances, specifically, up to €2.4 million in gross profit annually. Additionally, introduction into production of the more sustainable feed solutions developed by the group, which will bring positive economic benefits for the animal husbandry segment.
"We will make every effort to ensure that this business built up over long years, encompassing diverse agricultural activities all across Lithuania and positively impacting regional development, continues its regular operations and significant contribution to the country's economic growth. By restructuring, we will preserve jobs in Lithuania's regions, continue to responsibly pay taxes to the state, and maintain our existing infrastructure and extensive network of suppliers and clients," Kestutis Jušcius says.
The primary goal of the parent company's restructuring remains to ensure the viability of the business, as well as to maintain long-term solvency and satisfy obligations to creditors. The Company will aim to prepare and finalize the restructuring plan in coordination with all interested parties during the first half of 2025.
Contacts:
CEO of AUGA group, AB
Elina Chodzkaite-Barauskiene
+370 5 233 5340
