Savola's proposal highlights its intention to cancel nearly 740 million shares, reducing the total number of outstanding shares from 1 billion to around 266 million. According to the company's board, this drastic reduction will not affect shareholders’ equity or the company’s ability to meet financial obligations, but will provide a clearer path to profitability. Shareholders have been informed that the capital restructuring is designed to boost the company's financial health and restore investor confidence.
The decision to cut capital follows several challenges faced by the group, including declining profits in its edible oils and sugar businesses. These sectors, despite being Savola's core revenue generators, have struggled due to fluctuating commodity prices and increasing operational costs. The group's retail division, led by Panda supermarkets, has also faced stiff competition, leading to subdued performance.
Analysts suggest that the capital reduction could improve Savola’s long-term prospects, as the company has been focusing on cost-cutting measures and operational efficiencies. However, concerns remain about whether these changes will be sufficient to turn around the group’s financial performance, especially amid ongoing market volatility and competition in key sectors.