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The postponement of the stockholder’s assembly was agreed upon with the Deputy Prime Minister of the Croatian Government and Minister of Economy, Damir Polančec, even though this decision caused damages to the 687 small stockholders and Anto Perković, who holds 34.7 % of the company’s base capital.

If the assembly had taken place, I am convinced that the state-owned funds would support the management’s suggestions, since they are in the interest of the company and its employees. Moreover, Badel 1862 bought back half of its shares from the Capital Fund portfolio, so it would be immoral to vote against our suggestions. “The postponement of the assembly only prolonged these decisions, but it is logical to listen to the Deputy Prime Minister,” said Ante Perković, President of the Management Board of Badel 1862, at a press conference organized in order to clarify the reasons for the assembly’s cancellation and to present the current business and financial situation of the company. This is why the representatives of the company’s Board (Perković and Zvjezdana Blažić) were joined by Executive Director of Sales, Srđan Ored, Sales Director, Vera Čelar, and Financial Director, Zlatan Kuljiš. Perković spoke openly that the stockholders that he represents are not ready to settle for handing over the company to interest groups that do not intend to invest in production and the company’s future. According to Perković the representatives of the rival group of owners led by the KD fund from Ljubljana and small stockholders holding 15% of the company’s shares, part of them being former company managers, want to discharge the Board and gain control over the company in order to sell-off its real estate portfolio. “What bothers some of these stockholders/former managers is that they have contracts to purchase stock options with preferred pricing/conditions which are not at their disposal until December 31, 2010.” “In the meantime, they have left the company and a significant number did not fulfill the terms of their management contract. At the same time, they probably have received great offers from KD for these stock options, making them nervous,” explains Perković. “On the other hand, we are interested in the future of this company and developing it into a regional leader, which we believe is in the interest of the Croatian Government. We do not see any reason for the state-owned funds to support the interests of an investment fund from Ljubljana,” said Perković, in his message to the Government. According to Srđan Oreb, unlike in Q1 of 2009, in Q2, the company experienced growth of 2% in all production programs, in comparison to the same period last year. Growth was visible in the sale of red wines (40%). Badel 1862 is preparing for another vintage and Badel’s exports are much larger than their immediate competitor. The company’s total debt is 320 million kunas with total assets of 870 million kunas of which 462 are long- term assets. Total company debt is below 50% of the company assets, while current debt calculates 90 million kunas. Journalists were notified of the procedural reasons used to postpone the assembly.