The extension of the term for preparation and approval of the plan of legal protection proceedings

7. August, 2019

AS VALMIERAS STIKLA ŠĶIEDRA (hereinafter – “Company”) has filed an application in the court regarding the initiation of the legal protection proceedings (hereinafter – “LPP”), and Vidzemes District Court has passed a decision on 18 June 2019 to initiate the LPP of the Company, as well as has determined that the plan of LPP must be prepared and filed with the court by 19 August 2019 (hereinafter – “Plan”).

The Company is a large production undertaking, and the export market for its products reaches global scale. The Company’s products recently were manufactured on two continents and in three countries worldwide: in Latvia, the United Kingdom and the United States of America (hereinafter – “USA”). The products reach the Company’s clients through a complicated network of suppliers and distributors, therefore the full payment cycle for these products can extend over several months.

The Company would like to express its sincere appreciation to all its creditors and business partners for their support, allowing the Company to continue the production and sale of its products in this challenging time.
As the Company has already publicly announced, production has been partially suspended at the plant of its USA subsidiary, and the Company has also discontinued the flow of investments to the USA plant, in order to avoid incurring further financial losses. The Company has enough resources to continue full-scale production, which will procure the Company’s ability to satisfy its creditors’ claims.

The Company has attracted financial and legal experts proficient in the relevant areas of expertise and is carefully working on the elaboration of LPP Plan to be able to file it with the court within the term prescribed by the court.

While developing the LPP Plan, the Company is guided by its commitment to satisfy all its creditors’ claims to the extent of the principal debt. The Company appreciates its creditors and business partners and is looking for a sustainable solution which in the given circumstances would meet the best possible interests of all creditors.
A reasonably precise calculation of the timeframe for the implementation of the LPP Plan requires a considerable amount of work and time investments, as it is based on careful planning of finances and cash flow.

Despite the above-referred challenges, the Company is already working with due care on the preparation of initial LPP Plan, so that it could be completed within the term set by the court decision, i.e. by 19 August 2019.  However, additional time will be necessary for the preparation of the final version of the Plan and for the receipt of the consent from the Company’s creditors.

According to Article 40 paragraph two of the Insolvency Law, the term for the preparation and approval of the plan of LPP Plan may be extended by one month, if agreed by the majority of creditors, as defined in the Insolvency Law, and if the court is informed immediately.

In the light of the above-referred, the Company on August 5, 2019 sent out to its creditors the letter, where Company sincerely asks its creditors to continue cooperation with the Company and to provide a written consent for the extension of the term for the preparation and approval of the LPP plan by additional one month (i.e. until 18 September 2019), by signing the written consent.