News
03 Mar, 2023
ELKO adjusts the Group's legal structure
Continuous feedback from ELKO Group's financial stakeholders clearly indicates that the Group's business in Ukraine is currently associated with increased financial and security risks, adversely affecting ELKO Group's overall risk profile. Therefore, starting from February 20, 2023, a subsidiary in Ukraine exits the ELKO Group legal structure and continues its operations as a franchisee.
On February 20, 2023 (registration completed on March 3, 2023), Akciju Sabiedrība ELKO Grupa (ELKO Group) sold a 100% stake in ELKO Ukraine LLC. It is expected that the entity under its new owners will continue to serve the market, retaining the ELKO brand based on the franchise agreement.
"Given the current circumstances in the Ukrainian market, ELKO Group is satisfied with the achieved business results. However, in spite of excessive risk management efforts from the Group's side, we continue to see concerns from our stakeholders – banks, insurers, and vendors - about the further sustainability of these operations. In order to preserve the ELKO Group's hard-earned financial credibility and solid credit profile in markets outside Ukraine, we see the necessity to divest the Ukrainian entity. At the same time, we sincerely hope for continued cooperation in the new relationship model and trust in ELKO Ukraine's ability to serve the market, retaining high business standards established over ELKO's 24-year operation in Ukraine," comments Svens Dinsdorfs, CEO of ELKO Group.
Since March 2022, ELKO Ukraine LLC’s business operations in Ukraine have recovered and have generated commendable business results in 2022. Despite the complex circumstances, ELKO continues to provide the Ukrainian market with IT and consumer electronics, providing a broad range of goods from 150 vendors to more than 800 customers.
"Given the current circumstances in the Ukrainian market, ELKO Group is satisfied with the achieved business results. However, in spite of excessive risk management efforts from the Group's side, we continue to see concerns from our stakeholders – banks, insurers, and vendors - about the further sustainability of these operations. In order to preserve the ELKO Group's hard-earned financial credibility and solid credit profile in markets outside Ukraine, we see the necessity to divest the Ukrainian entity. At the same time, we sincerely hope for continued cooperation in the new relationship model and trust in ELKO Ukraine's ability to serve the market, retaining high business standards established over ELKO's 24-year operation in Ukraine," comments Svens Dinsdorfs, CEO of ELKO Group.
Since March 2022, ELKO Ukraine LLC’s business operations in Ukraine have recovered and have generated commendable business results in 2022. Despite the complex circumstances, ELKO continues to provide the Ukrainian market with IT and consumer electronics, providing a broad range of goods from 150 vendors to more than 800 customers.
Other news