The Court decided today to reject the plan for the reorganisation of Tere AS, but Tere will definitely appeal the first instance ruling.
“The ruling is unwelcome news to all creditors of Tere, but we will definitely challenge the decision and believe that the superior court will approve the reorganisation plan,” said Roland Lepp, Chairman of the Supervisory Board of AS Maag Grupp. “The approval of the reorganisation plan is crucial for the future of Tere. In the event that the Court refuses to approve the reorganisation plan, Tere is very likely to become insolvent, and the majority of Tere’s creditors and many agricultural producers will lose money.”
“It is in the interests of Tere that the reorganisation plan is approved and the company continues to operate,” said Katre Kõvask, Chairperson of the Supervisory Board of Tere AS. “As a result of the merger on 4 July, Tere became a member of the Maag Grupp – a robust domestic owner – which provided initial stability. It is in the interests of both dairy producers and consumers that the company continues, and reorganisation is the best option for Tere because the company and its employees are a valuable asset that cannot be discarded.”
“Tere’s debts were incurred due to the decisions of the previous owner,” said Katre Kõvask. “While Maag Grupp acquired Tere’s loan claims from Nordea and DNB banks this spring and thus became the largest creditor of Tere, other creditors, including milk producers, are still awaiting their money. Together with Maag Grupp, it will be possible to pay the debts according to the reorganisation plan, and continue the successful work in milk processing and dairy production.”
The reorganisation procedure of Tere was initiated by a ruling of Harju County Court of 18 February 2016. On 18 April of the same year, Tere filed an application for the approval of the reorganisation plan submitted to the Court, which had not been approved by the creditors. In spring, Maag Grupp prepared a waiver of its declaration of intention for the court, according to which the votes of the former largest creditors, Nordea Bank and DNB Bank, against the reorganisation plan were to be considered votes in favour. Judge Hannes Olev accepted the waiver of the declaration of intention, and on 9 June released the reorganisation advisers on the basis of their own applications. The judge appointed Aavo Koppel as the new reorganisation adviser.
On 19 July 2017, the Court decided to reject the reorganisation plan.
On 15 March, Maag Grupp submitted a concentration notice to the Estonian Competition Authority for the merger of Tere and Farmi Piimatööstus, which was approved by the Competition Authority on 4 July. During the first stage of the merger, Tere will continue to operate as a subsidiary of Farmi Piimatööstus.
The Tere AS (www.tere.ee) trademark was established in 1996. Tere is a sales and production company with an extensive range of products. It has grown from a milk processor into an innovative company. Tere’s main activities are buying up raw milk, production and the sale of dairy products. Its list of products includes more than 150 high-quality products.
AS Maag Grupp (www.maag.ee) is a company based on Estonian capital, which started its activities in 1996 and has since grown into a group of companies dealing with the production and sale of food products. AS Maag Grupp incorporates the companies Farmi Piimatööstus, Rannarootsi Lihatööstus, Pouttu, Avalon Foods, Maag Food, Gelid Food and Nigula Piim.