Russia: Carlsberg, S&N to propose Baltika restructuring plan again within 6 weeks

Carlsberg AS and Scottish & Newcastle PLC intend to again propose their restructuring plan for their Russian breweries to shareholders in Russian brewery Baltika, in about six weeks, daily Berlingske Tidende reported on July 27, citing Carlsberg deputy managing director Paul Bergqvist, according to AFX News.

In May, Baltic Beverages Holding AB (BHH), a 50-50 venture between S&N and Carlsberg, announced plans to consolidate its majority stakes in five separate Russian breweries.

This involved the largest brewery, Baltika -- in which BBH owns 74.5 pct -- buying out the other four.

At a Baltika board meeting earlier this month, Carlsberg and S&N proposed that Baltika buy both BBH and minority shareholders out of Pikra, a small Siberian brewery, which would cost Baltika more than 500 mln dkr, the daily said.

The proposal failed, partly because the minority shareholders in Baltika did not want the brewery's debt growing because of the transaction. "We will make the proposal to the board again, probably in the course of the next month and a half," Bergqvist said.

Located at St Petersburg, Baltika is Russia's leading brewery. "Our ambition is to carry out the restructuring within one to two years," Bergqvist said. "I am convinced that it will go through."

In a separate article, Bergqvist told Berlingske Tidende that Carlsberg is not restructuring the Russian operations in order to extract money to repay some of Carlsberg's 22 bln dkr debt.

"We will simply restructure in Russia, as that is the best possible solution for our Russian business," he said. "It's positive for all shareholders in Baltika - both majority and minority shareholders."