Baltika                       NEWS RELEASE                      05/05/2003



CONVERTIBLE BONDS ISSUE



AS Baltika issued 192,000 convertible bonds of class C

for the price of EEK 1 each as the final stage of the

three-year motivation programme aimed at the top

executives of the Baltika Group. According to the

conditions of the convertible bonds, the bond holders may

convert the bonds into shares of Baltika from 1 May 2004

to 1 May 2006; each bond entitles the holder to subscribe

for one share of Baltika.

The weighted average price of a Baltika share on the

Tallinn Stock Exchange from 1 January to 31 March 2003,

which was EEK 37.57 per share, will be the buying price

of the shares. The convertible bonds were subscribed for

by 29 top executives of Baltika. All the convertible

bonds have been paid for.





Meelis Milder

CEO

+372 6302 731