Auga Group, one of the largest organic food producers in the Baltic States, which is experiencing financial difficulties, will be restructured, the group's shareholders decided on Wednesday, after approving a draft four-year restructuring plan.

Shareholders have instructed the company's board to draw up a final plan, the company said on Wednesday via the „Nasdaq“ Vilnius Stock Exchange.

The restructuring plan is expected to be prepared and agreed in the first half of 2025, subject to approval by shareholders and creditors.

The group made the plan public at the end of November. The company plans to double its operating costs by 2027 and to sell some businesses and assets. The group plans to merge or close up to 60 companies.

The Group's cost reduction programme is expected to reduce costs by a factor of 2.1 by 2027 compared to 2023, from €13.9 million to €6.5 million. In addition, it plans to sell some of its businesses or individual production activities located away from its main operating centres and to use the assets needed for its operations on a long-term lease basis.

„Auga Group“ also plans to optimise the activities that remain at the core of its businesses, such as crop production, livestock farming, mushroom cultivation, the supply of finished products, to divest unprofitable land and to pursue conventional production.

It will also seek to accelerate the recruitment of new businesses, such as biomethane production, which is expected to generate gross profits of up to €2.4 million annually, and the use of more sustainable feeds developed by the Group in livestock farming.

„Auga Group“ chairman of the board, Kęstutis Juščius, has said that the restructuring was initiated following financial challenges caused by inflation and rising production costs, as well as the volatile prices of organic raw materials.

He said the group will discontinue the development of innovative agricultural technologies and engage in normal agricultural activities, as well as lay off staff.

„Auga Group“ announced the restructuring on 10 November.