AS Tallinna Moekombinaat is submitting the reorganization plan for the court’s approval

Pro KapitalOn 3 April 2020, AS Pro Kapital Grupp (Pro Kapital) notified about the initiation of reorganization proceedings of its subsidiary, AS Tallinna Moekombinaat. On 7 May 2020, Pro Kapital announced that AS Tallinna Moekombinaat had submitted a reorganization plan for the acceptance of its creditors, outlining a brief summary of the measures to be applied in the plan. The creditors were asked to cast their vote regarding the reorganization plan no later than on 26 May 2020 at 18:00 EET. Substantial majority of the creditors voted for the acceptance of the plan. However, the claims of the creditors who voted for the plan, were not sufficient to get the plan approved.

According to the Reorganization Act, a reorganization plan shall be considered to be accepted, if at least half of all the creditors who hold at least two-thirds of all the votes (i.e. the volume of claims) vote in favor. If creditors are divided into groups, this requirement must be met in all groups.

As more than half of the creditors in each of the creditor groups did vote in favour of the plan, then AS Tallinna Moekombinaat can move forward with the reorganization proceedings and ask the court to approve the reorganization plan without the prior acceptance of the plan by the creditors. Such application must be submitted to the court by 2 June 2020 at the very latest.

The court will decide on AS Tallinna Moekombinaat’s application to approve the reorganization plan within 14 days of receipt of the respective application. If the court decides to satisfy AS Tallinna Moekombinaat’s application, the court will appoint at least two experts to evaluate the plan. The court will also set a deadline for deciding on the approval of the plan, which cannot be longer than 60 days from the court ruling to satisfy AS Tallinna Moekombinaat’s application. The court can approve the reorganization plan, if at least one of the experts finds that the reorganization of the company is likely to succeed. If the court refuses AS Tallinna Moekombinaat’s application to approve the reorganization plan, the reorganization proceedings shall be terminated, however such decision will be subject to appeal.

AS Tallinna Moekombinaat’s reorganization would help to save the company and the jobs of around 1 000 people. It would also enable AS Tallinna Moekombinaat to satisfy the claims of the creditors to a much larger extent than it would in case of AS Tallinna Moekombinaat’s bankruptcy.

AS Tallinna Moekombinaat’s management is thankful to all the creditors who voted in favour of the plan and showed their trust in the management and in the company.

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