Distressed company Lehto Group is trying to avoid bankruptcy

Lehdo Group has submitted a proposal for a restructuring plan to the Oulu District Court.

Lehdo Group The basis of the business is the production of industrial products that accelerate construction in its domestic factories: technical studios for apartment buildings and small houses, wooden apartment blocks, second homes for leisure, windows, doors and components, for example, roofs, walls and plumbing repairs. The company used factory production at its own locations and sold products to operators and construction companies in the construction industry.

However, this operating model faced profound difficulties.

The construction team’s operations were loss-making, order backlogs were shrinking, and cash reserves were low. At the same time, the construction market and short-term market opportunities are at a low level.

Hence subsidiaries of Lehto Group Leto Apartments, Grove facilities And Lato repair construction Declared bankrupt last February, on February 16, corporate restructuring proceedings were initiated at the group’s parent company, Lehto Group.

Because of its difficulties, Lehto has become a one-cent share on the Helsinki Stock Exchange. Almost 85 percent of the stock’s value has melted away in a year, and it is currently quoted at over EUR 0.03.

District Court Renovation Project

Corporate Restructuring Practice Liquidator, Advocate Class Majamaki The company has submitted a restructuring plan proposal to the Oulu District Court on June 17.

In the view of the company and the liquidator, the reorganization plan will have a better outcome for the company’s creditors than bankruptcy.

The goal of the restructuring plan, among others, helps the company to announce on May 29. Starting a power construction industry.

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The restructuring plan is based on the fact that the company is completely divesting the construction business of the Lehto Group and focusing its business on energy solutions for properties and electricity storage.

Together with its partners, the construction company has implemented various electrical and thermal energy solutions for buildings, and the increase in electricity production based on renewable energy sources and the increase in the property’s own energy production solutions have created needs and opportunities. Efficient use of energy.

Lehto strives to develop and implement solutions that achieve energy savings and improve the balance between buildings’ own energy production and energy use. The solutions combine underfloor heating, solar energy and the use of batteries.

The company believes that more efficient use of energy increases the value of properties and enables new financial solutions for property owners.

In order to start the energy construction business, the company must receive 2.5 million euros in equity financing within three months calculated from the time when the decision to confirm the restructuring plan takes legal force. In addition, the company needs another 2.5 million euros in debt or equity financing by the end of 2025. With the approval of the supervisor of the restoration project, the deadline for obtaining financing can be extended.

The company is obliged to ensure that its EUR 15 million convertible bond is converted into company shares, subject to at least EUR 10 million receivable by the end of the current year from Lehto Invest Oy.

Payments pursuant to the payment plan included in the restructuring plan are partially funded by the Company’s asset realization activities and future payments available to the Company. Therefore, the company is obliged to sell most of the assets in the schedule mentioned in the restructuring plan at market prices and collect the credits identified in the restructuring plan.

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Debt Rescheduling Scheme

The restructuring loans of the company are arranged in the restructuring plan, which enables the company to meet the payment and interest as per the payment plan with the proceeds from the sale of the company’s assets and the liquidity of the company. Construction industry.

Collaterals included in the restructuring plan total nearly 3.5 million euros. Collateral loans must be paid when the collateral assets are realized from the net realizable value of the collateral assets, but not more than the amount of the collateral loan.

The amount and basis of clear non-priority restructuring loans totaled more than 19 million euros, including, among others, the company’s convertible bond. The amount of non-concessional reconstruction loans is reduced by 90 percent of the receivable amount.

The company is obliged to make additional payments for non-concessional restructuring loans while meeting the conditions specified in the restructuring plan.

Payments for restructuring loans, conditional or up to an amount, are deposited into an escrow account. The payment plan payment for the escrow account is 75 percent of the maximum amount of unsecured loans remaining after the loan is reduced. Such restructuring loans total approximately 42 million euros.

According to the restructuring liquidator, the company has paid off all known minor debts.

Early completion of the reconstruction project is possible on July 1. The pre-condition for early termination is that the company pays the collateral loans and their interest in full, payment plan payments and additional payments for non-concessional restructuring loans and a special surcharge based on early termination.

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