MLK Foods PCL in the conditions of war of Russia against Ukraine kindly asks to accelerate the court case of Pekao Bank and Milkiland EU Sp. z.o.o. on cancelling the issue of the additional capital of Ostrowia Sp. z.o.o. (Case VII GC 11720 of the District Court of Bialystok).
In 2012 MLK Foods PCL (at that time Milkiland N.V.) established a subsidiary company Milkiland EU Sp. z.o.o. and granted to this company the financial resources in the amount of PLN 49.3 million for acquisition from Invest-Bank Spolka Akcyjna of 100% stakes in the company, which controlled cheese-making plant Ostrowia, located in the city of Ostrow-Mazowiecka, Republic of Poland. At that moment the plant was under the bankruptcy procedure, the volume of the production stood at minimum. Our Group financed the respective deal, including out of the funds of Polish and other investors, which participated in the IPO of Milkiland N.V. in December 2010 and invested to the company over PLN 200 million.
After the acquisition the company was renamed to Ostrowia Sp. z.o.o. The Group fulfilled the reconstruction of the production facilities of the plant and significantly increased the production of finished products (cheeses). Also, the Group managed to get the permissions from Polish veterinary authorities to sell our products in the domestic market and export markets of EU countries, Ukraine and Russia. The financing from Pekao Bank and Pekao Leasing was raised to proceed with the reconstruction.
Unfortunately, starting from 2014 when Russia initiated an aggression towards Ukraine until today, when its transferred to full-scale aggressive war against our country, the business environment for the Group had been constantly worsening, which led to inability to serve our obligations to creditors, including to Pekao Bank and Pekao Leasing, while our subsidiaries Milkiland EU Sp. z.o.o. and Ostrowia Sp. z.o.o. generated losses for the Group.
In summer 2019, MLK Foods PCL hired Mr. Wictor Aderichin, citizen of Poland. He betrayed the confidence of the Group’s management by lobbying the signing of the investment agreement with the company Crema Vita Sp. z.o.o., in which he also held the Director’s position. According to this agreement, the investor took the responsibility to implement the investment project aimed at the organization of the production of innovative products (cheeses) in the “Ostrowia” plant, entering to the new markets in Western Europe in order to improvement of the financial standing of Ostrowia Sp. z.o.o. and fulfillment of the obligations of this company to creditors.
As the result of signing of three-party investment agreement between Milkiland EU Sp. z.o.o., Ostrowia Sp. z.o.o. and Crema Vita Sp. z.o.o., the General meeting of Shareholders of Ostrowia Sp. z.o.o. was held and the decision of increase of the share capital of this company was adopted. The control over Ostrowia Sp. z.o.o. was granted to Crema Vita Sp. z.o.o., which secured the control over 80% of share in the capital of this company.
During the period of the collaboration since summer 2019 to June 2021, Crema Vita Sp. z.o.o. broke its obligations under the investment agreement. The direct responsibility for that holds Wiktor Aderichin and the management was appointed by him.
In a view of the fact of breaking the conditions of the investment agreement, in August 2021 Milkiland EU Sp. z.o.o. joined to the legal claim of Pekao Bank on cancelation of the decision of increase of the share capital of Ostrowia Sp. z.o.o. (Case VII GC 117_20 PEKAO against Ostrowia Sp.z o.о. in the district court of Bialystok, XII economy department). In September, 2021, Milkiland EU Sp. z.o.o. got the decision of the Court on joining to the above mentioned case (please find the copy of the respective decision by the following link: https://drive.google.com/file/d/1DynFxet7MEwQuiw_5pS0pWYJWmaCqVAG/view?usp=sharing).
The Group regrets to state that as of today, after the more than 2 years from the beginning of the hearings of the above mentioned court case, the decision on returning of 100% stake in the capital of Ostrowia Sp. z.o.o. to Milkiland EU Sp. z.o.o., the Group’s subsidiary in Poland, was not adopted.
In the conditions of the contemporary hazard of the destruction of the plants of the Group in Ukraine, including by the rocket strikes from Russia, further delay with the adoption of this decision will make the business of the Group in Poland impossible.
Public holding company MLK Foods PCL, which shares are listed in WSE, being a foreign investor to Poland, kindly addresses to the competent authorities of the Republic of Poland to accelerate the court case on the returning to Milkiland EU Sp. z.o.o. the control over 100% stake in Ostrowia Sp. z.o.o.
About MLK Foods Public Company Limited
MLK Foods Public Company Limited is a diversified producer of dairy products in Ukrainian market, offering a wide range of dairy products such as fresh dairy, cheese and butter, to satisfy consumers in their everyday needs for healthy and tasty foods.
In Ukraine, the Group operates several plants and offers wide range of fresh dairy, cheese and butter under “Dobryana”, “Latter” and “Blagodar” brands.
MLK Foods PCL also exports dairy products from Ukraine several countries.
Shares of MLK Foods PCL – the Cypriot holding company of the Group has been listed on the Warsaw Stock Exchange since December 6, 2010.
For additional information please contact:
Investor Relations Officer, MLK Foods PCL,
tel. + 380 67 327 9838 mob.