Baltika                       ANNOUNCEMENT                         18.11.2004



Increase of share capital



According to the Conditions of Convertible Bonds adopted by a resolution of the

general meeting of the shareholders of AS Baltika on 6 April 2001 (see the stock

exchange notice of 6 April 2001) and by the resolution of  the general meeting of

AS Baltika on 30 April 2004 and taking into account the intention of the holders

of  46 500  A-convertible bonds to exchange them against the Baltika shares,



THE MANAGEMENT BOARD OF AS BALTIKA resolved:



1.    to increase the share capital of the company by 465 000 kroons (29 719

      euros), by issuing 46 500 registered shares with a nominal value of 10.00

      kroons per share;



2.    the share capital will be increased by exchanging 46 500 A-

      convertible bonds for shares after the difference between the nominal values

      of the bonds and shares has been paid. The holders of A-convertible bonds

      subscribed for 46 500 shares on 26. October to  01. November 2004 and paid

      for them by the time .



3.    the new amount of the share capital after the increase of the share capital

      is 56 339 500  kroons (3 600 750 euros);



4.    when exchanging A-convertible bonds for shares, the amount of twenty-

      four (24.00) kroons is payable per each share, taking into account the

      nominal value of the debenture paid upon its issue and the subscription

      price for a share as approved by a resolution of the management board;



5.    during this issue, the amount of the premium is fifteen (15.00) kroons

      per share;



6.    the issued shares entitle their holders to receive dividends as from

      the financial year of 2004.



The shares were  subscribed by the management of AS Baltika. Herewith the first

part the three-year option programme has been realized.





Ülle Järv

AS Baltika

Financial director

+372 6302 731