09 March 2022
Aventus Group | Andrejus Trofimovas addresses investors on the war's impact on business
The scale of world changes and the problems that the world has faced in recent days did not seem so serious a few weeks ago. It’s not for me to tell you, but we observed a real war of this magnitude back in 1939. I feel this situation especially deeply.
More recently, we at Aventus Group discussed plans for sales of loans for EUR 1+ billion in 2022; the forecasted net profit for 2022 was more than 60 million euros, but, obviously, in the coming weeks and months, Aventus Group faces completely different tasks – how to reduce expenses, how to settle with investors on time, how to keep business. Everything has completely changed.
Business cost optimization
So, first, we realized that we are obliged to give up on everything that does not make a profit yet. As a result, we switched to the “anabiosis” mode – to maintain life, all our startups that required higher investments, like Kenya, India, the Philippines, and Sri Lanka.
Further (and this was the most difficult thing), unfortunately unavoidable, we began to reduce the staff and reviewed the levels of salaries of our current employees, including other operational expenses.
Before the war, we had 2 000 people on our team. Unfortunately, we had to reduce our team by 400 colleagues (mostly in early-stage startups, IT, and HQ – it is easiest for them to find a new job, and the cost of their salaries was the largest). Some colleagues in the Group are on temporary unpaid holidays now, and others were transferred to a 4-day workweek.
What are we focusing on today?
Our main focus now is on profitable companies operating in Poland, Kazakhstan, Moldova, and Vietnam. All other companies of the Group are currently operating in collection mode to repay loans to investors.
It is important to highlight that all companies in Poland, Kazakhstan, Vietnam, and Moldova, are operating in an absolutely normal mode, as before the war, earning a profit.
Aventus Group in numbers today
On March 8, the total debt of Aventus Group to PeerBerry investors amounted to EUR 67,8 million. The total Group’s portfolio is EUR 165 million (real estate is not included). A good portfolio amounted to EUR 84,3 million (real estate is not included). Currently, about EUR 5 million are in companies’ accounts. Aventus Group also owns real estate, which purchase price was EUR 20 million (market value before the war: more than EUR 30 million). This property for development was bought exclusively from the profits of Aventus Group, no external funds were used, and Aventus Group, of course, if necessary, will sell it to settle with investors after the situation gets stable.
Thus, if today we managed to collect the entire portfolio and sell the property at the price at which we bought it, then, after settling with investors (covering war-affected loans in full), EUR 35 million would remain in Aventus Group, and this despite the fact that all portfolio values were calculated at the exchange rates on March 8, which changed a lot since February 24, the day the war began (PLN was 4.2 now 5.0, RUB was 85 now 140, KZ Tenge was 500 now 550).
It is also very important to note that the planned profit of Aventus Group companies (without war-affected countries) for 2022 is EUR 24 million.
Current challenges, full transparency, and full responsibility
The main challenge for today is that, unfortunately, today, there is no way to transfer money from war-affected countries since the national banks of these countries have banned currency transfers abroad, i.е. companies in these countries are now unable to service their debts on PeerBerry. And this is not our fault. Also, we would be happy to sell all the real estate for development in conflicting countries, but it is impossible to do this right now – we have to wait for the end of the war and some kind of minimal stabilization. I could not talk about the real estate as no investor money was used to buy it, but I’m for absolute honesty without compromise and for full transparency – therefore, we do not intend to hide any assets of the Group. I repeat once again, if necessary, we will sell it for settlement with investors as soon as the markets stabilize.
In the last week, my colleagues and I thought a lot about what best we can do in this situation to save the Group and settle with investors. Both are vitally important.
I responsibly state that I will not go anywhere and will fight for Aventus Group and full settlement with investors who have invested their trust and money into our business through PeerBerry. For me, Aventus Group is everything, and I will keep standing for Aventus Group’s transparency and values till the end. Aventus, for me, is definitely not about money. It’s a huge part of my life. It’s my colleagues and friends, a huge responsibility for the families of employees and investors’ money. After all, it’s a dream.
I want to reassure you, as the owner of this business and the major investor of PeerBerry, that based on the figures presented, Aventus Group can easily repay all war-affected loans in full, but for this, we need ways to transfer money from fighting countries to PeerBerry and a normal exchange rate is highly desirable ruble to euro, which over the past 10 days has unfortunately changed by 70% or we need a certain time to accumulate additional reserves from profitable companies profits, but it requires a time.
I ask for your understanding – theoretically, we can take all the money from “healthy” companies, directing them to repay war-affected loans, but this will completely bleed and kill the entire healthy business of Aventus Group. And without the money that is locked in fighting countries, we will still not be able to pay in full soon.
After this storm, Aventus Group will continue to work only in healthy markets, where we made money before; we will abandon a number (perhaps all, if necessary) of projects and start-ups where we invested our money but did not earn yet. We will reduce costs to a minimum, if necessary; in short, we will separate unhealthy cells from a healthy body, we will throw off all unnecessary expenses, and we will work only in a profitable light. Since there will be no unprofitable startups and expenses associated with their development, we expect that the profitability of our operations will increase. We will be further looking for options to transfer money from fighting countries to PeerBerry to cover the debt to investors sooner, but so far, currently, there are none. We must wait for the end of the war; currently, there is no other option.
I strongly believe in our business recovery. First of all, because of the unrealistically strong, best team in the world, the team with which we have always worked miracles, and who are now with me. Looking back to 2009, we grew from a small company in Lithuania with no investments at all to one of the largest, most successful, and most profitable companies in the world. And we will repeat the same success story again because we believe in it. I have no doubts about it, and this time for ourselves and for you, our investors.
Thank you for your understanding and support. I plan to share with you every week a status update on how our business is moving toward covering our obligations to our investors. I want to be by your side 24/7. Feel free to write to me personally at [email protected]. I will try to answer all your questions. But due to the large amount of work now, I hope for your understanding if I do not answer immediately.
Andrejus Trofimovas, CEO of Aventus Group