Crowdestor E-mail: Premium Foods Confectionary (UPDATE)

platform e-mail
We would like to give you a status update that has been received from the Borrower “Premium Foods Confectionery LLC”

August 26, 2020

E-mail from Crowdestor

We would like to give you a status update that has been received from the Borrower “Premium Foods Confectionery LLC”:

“It has been a while since we had an update on our situation and the effect COVID-19 has had on our economy and business. In this letter, we would like to give you an update on our situation as well as planned steps in order to minimize possible losses.

Georgia reported its first confirmed COVID-19 case on February 26, 2020. Georgian economy has been hit particularly hard due to COVID-19 shutdowns. First, our country’s largest export is tourism, accounting for USD 3,22 billion, accounting for 39% of all exports. This season has seen a 94% drop in international travelers (, with international tourism ban initially planned till the end of June, now has been postponed to later dates which are not announced yet, since COVID-19 situation differs and changes rapidly from country to country. Secondly, tourism and trade are major drivers for most other sectors in the market, such as hospitality, air, and other transport (accounting for another USD 845 million exports), the recovery in economic activity has been slow as borders remain closed and international travel is broadly banned. This in addition has had a negative effect on local currency, Georgian Lari (GEL) has depreciated by 18% from 3,09 GEL/EUR to 3,66 GEL/EUR.

Hotels, bars, and restaurants are suffering the most. Meaning the stock we have acquired has very low turnover since hotels are open only to local tourists or accommodate people who have to be in self-isolation, thus changing their meal menus to local cheap produce. Tourism was expected to be open in mid-June, which has been constantly extended to later dates and today there is no consensus when and if this year before a viable vaccine is available, that will happen at all.

We have been doing our best to switch our sales to retail clients and have had some success in this. Though our major focus is on the HORECA sector and its quick recovery which seems unrealistic this tourism season, therefore at the moment it is very hard to predict any scenarios for the future. With regret, we have to announce that we need to postpone any near future payments until we can come up with a feasible plan for business recovery and liability restructuring.

Today we are working to sell the stock at considerably discounted prices in order to accumulate cash for future operations, to bring new supply, and to generate profit in order to cover the restructured liabilities. We do look towards the next year full of optimism since the market is changing, many of our competitors have closed their operations – insolvency or otherwise, this indicates, that there will be fast growth opportunities next season. We have run down our operations to only essential staff and we plan to scale back once the borders open.

Stay safe and healthy!

Shalva Dadriashvili, Director

Giorgi Tenadze, Group CEO”

Please note that the Borrower will be obligated to pay the interests for the delayed period which will be calculated on the payment day.

We appreciate your patience!

Best regards, CROWDESTOR

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