Dairy producer Lactag aims to increase its share capital by 30.6 million RON to exit insolvency and invest in company modernization

Lactag (stock symbol LACT), one of the largest dairy producers on the local market – in insolvency since 2016 – aims to increase its share capital by about 30.6 million RON to exit the judicial reorganization stage and subsequently for investments in the modernization of the company.

The share capital increase is part of the strategy developed together with the insolvency administrator CITR and aims to immediately capitalize the company, exit the reorganization and strengthen its market position. As a first step, the majority shareholders will put 300.000 shares up for sale on the stock exchange – representing approximately 30 percent of the total number of shares, with the proceeds being used in full to capitalize the company.

The majority shareholders of Lactag are Robert Iriza and Adriean Asan-Mic, who hold 98.04 percent of the company’s shares (each with 49.02 percent of the company). The two shareholders took over Lactag in 2012.

“This capital increase is essential for Lactag’s future – we are very keen to get out of the judicial reorganization stage as soon as possible and focus on the development of the company.

We currently have a processing capacity of 1.5 million L/month, contracts and firm orders from major retailers leading to a tripling of processing capacity, which will allow us to reach a turnover of up to €31 million with an EBITDA of €4 million in 2024. Any investor who acquires shares from existing shareholders and becomes a shareholder with a reference date of 20.01.2022, gets a subscription rate of 12 new shares for one share held, which can ensure a great return on any amount invested in Lactag at this time.” says Adriean Asan-Mic, Lactag shareholder.

“We are open to partner with any other dairy industry players or equity investors and together strengthen Lactag among the top players in the industry.” says Robert Iriza, Lactag shareholder.

Lactag owns a milk factory in Costești – Argeș county and counts about 100 employees.  The company went into receivership in 2016, following accelerated development in 2012-2015 with major investments in the dairy industry, meat processing and in the retail area by developing its network of 50 stores.

For 2022, Lactag’s management estimates a turnover of €21.7 million and is counting on a net profit of €1.6 million.

For 2024, revenues of €31 million are estimated, up 42 percent from 2022. At the same time, the dairy producer’s management expects net profit to increase to €2.7 million in 2024.