Finnish owner of Lidskoe Pivo halts sale, to pay fine of 12 mln euros

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Finnish owner of Lidskoe Pivo halts sale, to pay fine of 12 mln euros

MINSK. April 21 (Interfax) - Olvi Group has halted the planned sale of its Belarusian subsidiary Lidskoe Pivo, the Finnish brewer reported in its financial statement for the first quarter of 2023.

The "company's shares are subject to a sales ban, as a result of which Olvi has discontinued the process to sell Lidskoe Pivo," the company said.

Olvi Group's board of directors decided at the beginning of March 2022 to leave the Belarusian market. But last July the Belarusian government compiled a list of companies whose foreign shareholders are prohibited from disposing of shares without the authorities' permission. The list of 190 companies includes Lidskoe Pivo, in which Olvi owns 96.4% of shares.

Last August, the Finnish company announced plans to sell the Belarusian brewery within 12 months, but noted this would require permission from the local authorities and competition regulator. Despite the restrictions, the company's management believed that, based on current information and the results of negotiations with local authorities, it would be possible to make the sale.

Olvi also said in its first-quarter report that the State Control Committee of Belarus imposed a fine of BYN35.8 million (12.2 million euros) on Lidskoe Pivo. The Belarusian subsidiary appealed the fine, but the Leninsky District Court in Minsk rejected the appeal on March 29, 2023 and ordered the fine to be paid. Lidskoe Pivo has appealed to a higher court and the process is still in progress, Olvi said.

Nonetheless, the fine has been recognised as an expense in the first quarter of 2023. The payment of the fine is expected to take place in the second quarter. The "fine has a significant cash flow impact" and "burdened" operating results, both in Belarus and for the group as a whole, Olvi said.

"The fine imposed on Lidskoe Pivo will be paid from local assets. The fine will significantly reduce the company's cash assets, but its operations are expected to continue despite the fine," Olvi said.