AS BALTIKA                 ANNOUNCEMENT         06.05.2005



Increase of share capital



Pursuant to § 351 (1) and (2) of the Commercial Code and the Terms and Conditions

of Convertible Bonds adopted by the general meeting of shareholders of AS Baltika

on 6 April 2001, and considering the wish of the holders of 189,000 B-bonds to

convert the bonds into shares and their subscription for the shares in accordance

with the aforementioned decision of the general meeting,



 THE MANAGEMENT BOARD OF AS BALTIKA DECIDED:

1.    To increase the share capital of the company to EEK 1,890,000 (EUR 120,

      793) by issuing 189,000 registered shares with a nominal value of EEK 10

      each.



2.    The share capital will be increased by converting 189,000 B-bonds into

      shares after cash payment of the difference between the nominal prices of

      the bonds and shares.



3.    The new amount of share capital after the increase will be EEK 58,229,500

      (EUR 3,721,543).



4.    Upon conversion of B-bonds into shares, EEK 33.09 (EUR 2.12) shall be

      payable for each share, taking into account the nominal value of the bond

      paid upon its issue and the subscription price of the share as approved by

      the supervisory board on the basis of the decision of the general meeting of

      shareholders.



5.    The amount of share premium in this issue is EEK 24,09 (EUR 1,54) per

      share.



6.    The issued shares shall entitle the holders to dividends as from making the

      entry in the share register.





Ülle Järv

Director of Finance

AS Baltika

+372 6302 731