Baltika                       NEWS RELEASE                      05/16/2003



INCREASE OF SHARE CAPITAL



According to the Conditions of Convertible Debentures

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 taking into account

the intention of the holders of  39 500 A-debentures to

exchange their debentures for shares,



on 16 May 2003, THE MANAGEMENT BOARD OF AS BALTIKA

resolved:



1.  to increase the share capital of the company by 395

    000,00 (three hundred and ninety-five thousand)

    kroons  (25 245 euros), by issuing 39 500 (thirty

    nine thousand five hundred) registered shares with a

    nominal value of 10.00 kroons per share;



2.  the share capital will be increased by

    exchanging 39 500 A-debentures for shares after the

    difference between the nominal values of the

    debentures and shares has been paid. The holders of

    A-debentures subscribed for 15,500 shares on 14 May

    2003 and paid for them by the time of the meeting of

    the management board;

  

3.  the new amount of the share capital after the

    increase of the share capital is 54 994 500 (fifty-

    four million nine hundred  ninety-four thousand

    and five hundred) kroons; (3 514 780 euros);



4.  when exchanging A-debentures 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

    2002.



AS Baltika has submitted to the Tallinn Stock Exchange an

application for listing an additional amount of  39 500

shares.





Management Board of AS Baltika





Ülle Järv

Member of the Board

+372 6302 731