The Board of Utenos Trikotažas Proposes to Shareholders to Approve the Restructuring of the Company
The Management Board of Utenos Trikotažas (hereinafter - the Company) has decided to submit a proposal to the shareholders to initiate restructuring of the Company. The restructuring would be intended to ensure the company's solvency and long-term business potential.
Global Shocks Affected Demand
"Pandemic, war, energy and other price shocks, and weakened demand have negatively impacted the textile sector globally over the past few years. Particularly in Europe, where producers are under further pressure from cheap labor countries in Asia. Utenos Trikotažas is no exception. A significant drop in demand and a lack of decisive action would only further weaken the Company's financial situation. To prevent this, the Company's board proposes to initiate the restructuring of the Company. This would give the Company the necessary time to regroup and restructure its business model to ensure its continued solvency and the fulfillment of long-term commitments," says Dovile Tamoševiciene, Chair of the Board of Utenos Trikotažas.
According to her, in recent years, Utenos Trikotažas has made significant efforts to improve efficiency, optimize processes, and reduce fixed costs. In parallel, the Company intensified its efforts to develop new markets and acquire new customers. Nevertheless, the overall demand decline caused by external factors is particularly significant. In the first quarter of 2024, Utenos Trikotažas sales dropped by 48.6% compared to the same period last year, to Eur 3.1 million. In the first 3 months of 2024, the Utenos Trikotažas group of companies incurred losses of Eur 1.48 million before taxes.
Priority for commercially viable activities
According to D. Tamoševiciene, the Company is currently finalizing the restructuring plan, which will outline measures on how the company will be restructured to achieve the main goal - ensuring long-term solvency and operational continuity.
"The main direction of the plan is to continue improving efficiency by reducing costs and eliminating unprofitable activities while maintaining as much prospective activity volume as possible. This is the focus of the restructuring plan, which will be submitted for approval to the shareholders and creditors," says D. Tamoševiciene.
To ensure operational continuity, SBA Group, the main shareholder of Utenos Trikotažas, made a financial injection to the Company earlier this year, providing a liquidity loan of EUR 1 million, which is being used to pay salaries to the company's employees, meet obligations to creditors, and make other payments necessary for operational activities. According to Ms. Tamoševiciene, the Company will continue to maximize its commitments to employees, customers, and partners before and during the restructuring.
For additional information, contact:
AB Utenos Trikotažas representative Egle Rakauskaite,
egle.rakauskaite@ut.lt, tel. +370 619 66107
