Panevėžys Regional Court has approved the restructuring of SBA Group company Utenos Trikotažas, which aims to shift toward profitability and ensure sustainable continuity. The court has also approved the company’s four-year restructuring plan, which outlines the necessary measures and funding sources for its transformation.
"We have been anticipating this court decision, as we have already initiated important processes and negotiations that are crucial for the company’s successful transformation. The restructuring will give us time to reorganize our business model and ensure the company's solvency as well as the long-term fulfillment of its obligations," says Dovilė Tamoševičienė, Chair of the Management Board of Utenos Trikotažas.
The restructuring plan approved by the Court focuses on further efficiency improvements in the operations of Utena Trikotažas by reducing costs and eliminating loss-making activities while maintaining as much of the company’s viable operations as possible. Due to declining demand, contract manufacturing volumes have dropped, making certain processes inefficient and costly. The restructuring plan therefore foresees increasing the use of subcontracting services. The aim is to adjust the company so that, even with lower sales, it can restore profitability and meet its obligations to employees, creditors, and partners.
Regardless of the outcome with contract manufacturing, the restructuring plan envisions continuing the production of the company’s own brands, which remain profitable. The sales of the Utenos brand products in Lithuania are relatively stable and contribute approximately 12% of the company’s total revenue.
The restructuring plan also offers the possibility to realise various assets: real estate, movable property, and securities. Proceeds from these sales will primarily be used to meet creditor obligations. One of the main assets to be sold is the large Utenos Trikotažas manufacturing complex and administrative facilities.
The approved restructuring plan also includes the disposal of part of the equipment as well as shares of the subsidiary companies. Proceeds will first be used to cover obligations to employees and non-affiliated creditors, with the remainder going to the main shareholder, SBA Group.
To ensure the continuity of operations, SBA Group, the main shareholder of Utenos Trikotažas, made a financial injection to the company in a difficult financial situation this year and granted a liquidity loan of EUR 1,7 million, which has been used to pay employee wages, settle obligations to creditors, and fund other essential operational activities.
Additional information is provided by
Eglė Rakauskaitė, representative of AB Utenos Trikotažas,
egle.rakauskaite@ut.lt, tel. +370 619 66107
