More than two dozen companies of the largest organic food producer in the Baltic States, „Auga Group“, which is experiencing financial difficulties in the Baltic States, have applied to the courts for a court-ordered restructuring of the company,

the group announced on Friday via the „Nasdaq“ Vilnius Stock Exchange.

On Wednesday, shareholders decided to restructure the parent company of „Auga Group“ and approved its draft four-year restructuring plan.

„Restructuring of some of our subsidiaries will give us time to properly meet our obligations to all our creditors and to maintain our strategic operations in the regions, which add value to the national economy," Kęstutis Juščius, Chairman of the Board at „Auga Group“, said in a statement.

He said that following the information about the initiation of the restructuring of the parent company, some of the banks financing the group's companies decided not to extend or renew the maturities of the working capital facilities, which were usually extended in the past. 

It is reported that the courts have accepted petitions to initiate restructuring in the agricultural companies „AUGA Skėmiai“, „AUGA Smilgiai“, „AUGA Vėriškės“, „AUGA Dumšiškės“, „AUGA Grūduva“, „AUGA Jurbarkai“, „AUGA Lankesa“, „AUGA Gustoniai“, „AUGA Mantviliškis“, „AUGA Spindulys“, „AUGA Žadžiūnai“, „AUGA Želsvelė“, „AUGA Kairėnai“. 

Applications for restructuring have also been accepted in the companies „Gotlybiškės pienas“, „AUGA Ramučiai“, „Buktos pienas“, „Grain Lt“, „Pamargės pienas“, „Vaitiekūnai pienas“, „Baltic Champs“, „Agrotechnikos centras“, „Panemune pienas“ and „Gudelių pienas“, as well as in the agricultural cooperative „Agrobokštai“.  

The restructuring plan for the parent company of„Auga Group“ is expected to be prepared and agreed in the first half of 2025, subject to approval by the shareholders and creditors.

The company plans to double its operating costs by 2027 and to divest some businesses and assets. The group plans to merge or close up to 60 companies.

As part of the cost reduction programme, the Group plans to reduce costs by 2.1 times 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 required for its operations on long-term leases.

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

„Auga Group“ announced the initiation of the restructuring on 10 November.