E-Malt.com News article: Russia: Baltika Breweries completed share buyback

January 9, 2008 marked the completion of the process of reducing the share capital of Baltika Breweries by means of a buy-back and retirement of shares, according to company’s press release, January 14.

In accordance with the decision of shareholders adopted on October 15, 2007, the Company purchased 9,828,550 ordinary and 1,213,545 preference A-type shares.

The buy-back of shares took place in keeping with legislation of Russian Federation and in the order established by the Board of Directors. All of the Company’s shareholders were given the right to take part in the process — owners of both registered ordinary and preference A-type shares, regardless of the number of shares they owned, and including minority shareholders in the regions (Tula, Yaroslavl, Rostov, Chelyabinsk, Voronezh, Krasnoyarsk), for whom access to the stock exchange is rather difficult.

Baltika offered shareholders a fair price: each ordinary share was valued at 1,300 rubles, and each preference share, at 880 rubles. In this way, the sellers were able to achieve the market price of their shares without paying the expenses of intermediaries, brokers and stock exchange fees, commissions and other costs relating to the sale of securities.

The completed buy-back operation reflects the Company’s striving to increase return per share, raise the attractiveness of investing in Baltika and improve the capital structure of the Company.

In the course of restructuring capital, at the end of 2007 the Company took out bank loans totaling more than 300 million Euros which will be used to finance the share buy-back and partly to finance investment projects relating to the Company’s ongoing operations (increasing production capacity, building a new brewery in Novosibirsk, etc.)

As the Company forecast, after the amount of share capital changed, the percentage of voting shares held by Baltic Beverages Holding AB (BBH), the majority shareholder of Baltika, did not increase and amounted to 90.54%. This corresponds to the previously announced intention of the Board of Directors of Baltika Breweries to remain a public company.


16 January, 2008