Restructured Auga Group promises up to €40 million in shareholder benefits

After implementing a corporate restructuring, one of the largest organic food producers in the Baltics, „Auga Group“, which is experiencing financial difficulties, hopes to be able to pay out up to EUR 40 million to shareholders in three years' time.

The group also plans to repay €83.5 million in debt, raise new capital and significantly improve its financial performance, according to a four-year restructuring plan made public by „Auga Group“.

„The Group will be able to pay out up to €40 million to shareholders in 2028, or allocate it to the expansion of the Group's businesses. The company's restructuring plan will allow it to maintain and increase the jobs of the 1,030 employees working in the Group today, preserve the competitiveness of its existing businesses and create opportunities for their expansion," &bdash; „Auga Group“ said in the plan.

„The company will reduce the level of its financial liabilities from €83.5 million to €0 over a four-year period to 2029“, – the group said.

The source of funding to cover the financial liabilities and payments will come from the proceeds of the continuing agricultural activities and partly from the sale of businesses and assets, it said.

„In order to pay creditors, the company will inevitably need to sell some of its businesses“, – the company said.

The group said in the plan that it is already looking for a buyer for its stake in the restructured mushroom growing company „Baltic Champs“ – a sale of the company is expected to take place next year.

„Auga Group“ forecasts its earnings before interest, taxes, depreciation and amortisation (EBITDA) for 2029 to reach EUR 15.24 million, or 11.7 times this year's forecast (EUR 1.3 million), while net profit will rise 15.1 times to EUR 14.62 million (EUR 0.96 million).

The Group also estimates that its income from dividends from managed companies and the sale of businesses will grow 41.4 times to €14.5 million in 2029 compared to 2025 (€0.35 million this year), while sales revenue will fall by 19.3% to €3.29 million in 2029 (€4.01 million).

„Auga Group“ said the restructuring will also seek to raise additional capital, strategic investors and divest redundant functions.

„Auga Group“ also intends to spin off the dairy segment, develop and sell the Sustainable Milk Fund initiated by the group.

The company also intends to sell its land holdings and to spin off 11.5 thousand ha of its consolidated crop farming business into the Raseiniai Region Crop Production Fund.

Last Friday, „Auga Group“ announced that the restructuring is aimed at settling its creditors by 2029 and improving its financial performance on a group-wide basis.

The company's shareholders are expected to vote on the restructuring plan on 14 July.

BNS writes that the Lithuanian Court of Appeals has extended the deadline for „Auga Group“ to submit a restructuring plan until 19 July. The company sought the extension because it did not have an objective opportunity to prepare a final plan by the previously scheduled date of 19 May.

The court opened restructuring proceedings on 6 January and appointed „Valnetas“ as administrator.

Kęstutis Juščius, Chairman of the Group's Board of Directors, has said that the restructuring was initiated following financial challenges caused by inflation and rising production costs, volatile prices of organic raw materials.

BNS previously reported that „Auga Group“ has total creditor claims of EUR 94 million. The disputed claims of EUR 53 million mainly relate to the company's obligations, such as guarantees given for other companies in the group, which are also undergoing restructuring.