"Auga Group company fails to redeem €5 million bond

A second bond issue of EUR 4.984 million has not been redeemed by „AWG investment 1“, the subsidiary management company of „Auga Group“, one of the largest organic food producers in the Baltics, which is undergoing restructuring and is in financial difficulties. The redemption was promised after the sale of the mushroom business „Baltic Champs“.

The company had planned to redeem the bonds on 10 November, but only paid the interest and postponed the redemption date to 5 December, but failed to do so then. 

„AWG investment 1“ promises to ask the bondholders' trustee, „Audifina“, to convene a meeting of the bondholders in the near future, where it will present draft decisions on the way forward, „Auga group“ said via „Nasdaq“ on the Vilnius Stock Exchange.

In August, the portal „Verslo žinios“ reported that „AWG Investment 1“ had borrowed €5 million from professional investors in a private placement, issuing bonds with an interest rate of 14%. The underlying bonds were secured by a pledge of 100% of the capital of another group company, „Baltic Champs“ a mushroom business. 

The maturity date of the bonds was 10 November this year.

On 5 December, the company announced that it had signed a preliminary agreement for the sale of shares in „Baltic Champs“ with the Latvian-owned Mhitaryjans family company „Global Champs“. The majority of the proceeds from this transaction are expected to be used for bond redemption and interest payments.

In January this year, it was announced that the bondholders had decided not to call for early redemption of the bonds. Kęstutis Juščius, Chairman of the Board of Directors of „Auga Group“, said at the time that such a decision would allow the company to continue to operate in order to meet its obligations in a timely and orderly manner. 

As BNS reported, following the approval of the restructuring plan by Auga Group's shareholders and creditors in August, the Vilnius Regional Court also approved the plan on 2 September.

By the end of 2029, „Auga Group“ expects to have fully settled its financial obligations, reducing its debt from EUR 83.4 million to zero.