AB “Utenos trikotažas” will redeem 70% of bonds and reinforce its share capital

AB “Utenos trikotažas” has signed a five-year loan agreement worth LTL 16m with the DNB bank. A part of this loan will be used to refinance the current liabilities of the company, while the other part – for the redemption of the bonds issued which is scheduled on 12 January 2015.

The owners of bonds have given their applications to AB “Utenos trikotažas” requesting to redeem bonds in total for LTL 10.515m. The remaining bonds, valued at LTL 4.5m, will be converted to company shares. Thus, the share capital of AB “Utenos trikotažas” will increase from 5 to 9.5 million litas.

“We are pleased that the board of AB “Utenos trikotažas” managed to find a complex decision beneficial to all parties – the company, the bank and the shareholders – that has also solved the long-term problems generated by the global financial crisis back in 2008-2009, and hope that it will help to retain the rapid growth of activity the company has had”, Algirdas Šabūnas, the chairman of the AB “Utenos trikotažas” board, says.

This decision eliminates the uncertainty that was present until now in respect to the redemption of the bonds issued by the company, reinforces the share capital and also reassures a long-term financing of the company in favourable terms.

There was an agreement reached with the bondholders about the conversion of 30% of bonds into the share capital. According to Mr Šabūnas, this step of bondholders and shareholders clearly signals of their trust in the company’s long-term strategy of investments into the development of innovative technologies and materials, the development of the company-owned “ABOUT” trademark, and the search for new markets and clients. The fact that this year the company decreased the authorised capital and thus negated the loss in balance helped to reach this goal. Without this step, it would have been far-fetched to raise the additional capital.

The fact that the banks have approved of the strategy and the dynamics in the results of the company and have given their appealing proposals for the long-term financing of the company, is also pleasing in itself. The five-year long-term financing agreement that was drawn up today will not only allow the company to redeem the remaining 70%of bonds, but also to significantly – more than LTL 2m/year – reduce the interest expenditures, which will positively influence the net results in the future. Certainly, this long-term financing will ensure more opportunities to invest into the implementation of the strategy than there had been before.

“I believe that these news will reinforce the positions of the company in the course of communication with our suppliers, clients, other partners and investors, and will bring additional profit to the company, as well”, Algirdas Šabūnas, the chairman of the AB “Utenos trikotažas” board, says.

The operating profitof the AB “Utenos trikotažas”group for the 9 months of 2014 was LTL 4.2m (EUR 1.2m), whilein the same period in 2013 the group earned LTL 1.1m (EUR 0.3m) operating profit. AB “Utenos trikotažas” earned LTL 2.3m (EUR 0.7m) of operating profit for the 9 months of 2014, whilein the same period in 2013 the company incurred LTL 0.05m(EUR 0.02m) operating loss.

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