Банкеръ Weekly



The first official consolidation in the domestic glass-making will take place after the New Year. The merger of the Sofia-based enterprise Stind AD into the Plovdiv-based glass-works Drouzhba AD will legalize the leading position of the Greek company Ula Glass in this branch. Ula Glass privatized the two above-mentioned firms in 1997-1998 through its subsidiaries, registered in Cyprus - Glassinvest and Barec Overseas Ltd. It seems the time has come for Bulgaria's southern neighbours to consolidate their business in Bulgaria, because the management of Drouzhba AD, which is a public company, has already initiated the first steps (necessary for the merger) in front of the State Securities and Exchange Commission (SSEC). Under the Public Offering of Securities Act, when a company is transformed it should have a plan, drafted by independent experts with the necessary qualification and experience. They should also present to the shareholders a report on the financial state of the companies that are transformed. The report and the plan's parameters are to be approved by the SSEC and only afterwards general meetings of the glass-works Drouzhba and Stind can be invited to approve the merger. Currently, the procedure is at its earliest possible stage - Drouzhba presented to the SSEC the names of the two experts who will prepare the plan for the transformation. This requirement does not concern Stind as it is not a public company and its shares are not traded on the stock exchange.The indpendent experts should assess the value of the two companies that will merge, as well as the price of a share in each of them. Shareholders who are not satisfied with the price of the merger will be able to demand from Drouzhba AD to buy out their stocks at the price, evaluated by the experts. The majority Greek owner has been recently purchasing the shares of the Plovdiv-based enterprise at BGN2.50/apiece.The sales of the two glass-works were among the big privatisation deals, effected in 1997-1998. Stind was sold at USD4.05MN, and Drouzhba - at USD20MN. They are obviously among the best operating enterprises in the branch, having in mind that they export more than 50% of their output and and the same time hold the largest share on the Bulgarian market of glass bottles and jars. The Pleven-based enterprise Rubin is the major competitor of the two merging companies. The other domestic glass-works are in a poor state. Drouzhba's proceeds for the first half of 2002 were almost BGN30MN, and its profit exceeded BGN4.3MN.

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