09 March 2022
Aventus Group | Andrejus Trofimovas addresses investors on the war's impact on business

Dear Investors,

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. Unfortunately, I feel it even more deeply, because for the last 2 years I lived in Kyiv, Ukraine, and Russia, in addition to the team (500+ people), I have many friends and distant relatives there. Therefore, I feel this situation especially deeply.

Andrejus Trofimovas, CEO of Aventus Group

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 in warring countries, how to transfer people from war to more peaceful places, how to help the Ukrainian army, and colleagues who are literally under fire every day. Some of our colleagues from the first days are fighting in the Ukrainian army, including defending our freedom with you. Everything has completely changed.

We expect that the coming days and weeks will be the most difficult for our Group and the world in general. Why? The fact is that a big part of our business is located in Ukraine, where it is difficult to talk about business in general right now. In Russia, where we also have a big business, the euro exchange rate has changed from 85 to 140 per euro, i.e. in rubles, our Russian companies will have to pay 65% more than earlier.

In Aventus Group, from the first days of the war, we realized what kind of problems we faced, and therefore we immediately began to act. The first days we all devoted together to the emergency relocation of personnel to Lithuania and Poland, took out a lot of our employees and their families, transferred more than EUR 100 000 to help the Ukrainian army, and then began to optimize processes.

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, others were transferred to a 4-day workweek. Sadly, in Ukraine, we also had to decrease salaries, but we didn’t fire anyone, as now we need to support them as we can at least by ensuring a stable income. Many Ukrainian employees cried with happiness that their workplaces will be saved until the war ends.

I am also very surprised, that many of our employees, understanding the seriousness of the situation, took the initiative themselves to reduce their own salaries, all unanimously refused the bonuses already accrued. I was struck by the fact that how many letters I have received from my colleagues who, even offered to temporarily work for free.

What are we focusing on today?

Our main focus now is on profitable companies operating in Poland, Kazakhstan, Moldova, Vietnam, and Russia. All other companies of the Group are currently operating in collection mode to repay loans to investors. In Ukraine, we also collect some repayments of loans daily. We collect from 15% to 30% of pre-war volumes per day, which is surprising for us since we did not think that in wartime in Ukraine someone would pay at all. That is, that money is being accumulated on accounts in Ukraine right now.

It is important to highlight, that all companies in Poland, Kazakhstan, Vietnam, Moldova, and Russia, 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 on companies’ accounts. Aventus Group also owns real estate in Kyiv and Moscow, 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 Ukrainian and Russian 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 Ukraine and Russia) 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 Ukraine and Russia since the national banks of these countries have banned currency transfers abroad, i.е. Ukraine and Russia 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 Kyiv and Moscow (as shared above, before the war its valuation was more than 30 million euros), 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.

I also want to say right away that we cannot simply take and close a business in Russia right now, as many Western companies do. Primarily because of the debt to PeerBerry investors. We must first repay Russian loans to investors and then think about what to do with the business there. In addition, our services in Russia are used by ordinary people, who are far from politics, and most of them do not support the war, they are not to blame for what is happening.

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 to settle with investors. Both are vitally important.

I responsibly state, 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, friends, a huge responsibility for the families of employees and investors’ money. After all, it’s a dream.

Almost all my personal savings that I have today are held on PeerBerry, additionally, I have my personal property for rent in Kyiv (which is now affected by war) and that is almost all I have for now. By the way, the last, and unfortunately the most expensive apartment for rent in Kyiv, I bought on February 23rd at lunchtime, i.e. a few hours before the start of the war, taking a mortgage in Lithuania to buy it. Therefore, I personally have everything, absolutely everything, at stake. I will fight now for a small part of a bright future in the form of our Group, for the idea and principles that united us all, for the people who did all this with us, for investors, for their money, and for employees. Yes, it’s just a business, but for me personally, it’s my whole life. It’s my business. I will be with Aventus Group, and, of course, with you, our investors, to the end – no options.

Secondly, we have to understand that right now there are no possibilities to repay loans issued in Russia and Ukraine in full due to the restrictions of the central banks of those countries on transfers abroad. There is nothing we can do about it, and it is not our fault. Our previously formed reserves are not enough to cover the debt to investors for Ukrainian and Russian loans in the short term.

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 Ukrainian and Russian loans in full, but for this, we need ways to transfer money from Ukraine and Russia 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 Ukrainian and Russian loans, but this will completely bleed and kill the entire healthy business of Aventus Group. And without the money that is in Ukraine and Russia, we will still not be able to pay in full soon. In addition, we will leave another 1,600 people unemployed, including in Ukraine, where about 900 people work, whom, let me remind you, even in the most difficult situation, we did not fire and some of whom are now fighting with weapons in their hands, risk their lives defending their home and their right to freedom and who continue to work for the Group. In addition, I see no point in closing profitable companies, as their profits can be used to cover the debt for Ukraine and Russia, while there is a war. Therefore, I kindly ask you to wait until the block on transfers from Ukraine and Russia is lifted. This is the most important thing right now.

In addition, keeping our Ukrainian colleagues employed is the least we can do for them now. I also want to note that absolutely all of my investments are in PeerBerry, and almost all of my savings are invested only in loans from Ukraine and Russia, and I am vitally interested in returning them, although I could “shift” them to healthy countries, or simply pick them up I haven’t done it and won’t do it. I think this is the best confirmation of my belief that we will cope with this situation. We simply have no other choice.

Future vision

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 the 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 Ukraine and Russia 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 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 towards 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.

Respectfully yours

Andrejus Trofimovas, CEO of Aventus Group