UMICORE WILL INCREASE PRODUCTION OF ANODE COPPER
The general meeting of Union Miniere Pridop Med, held on September 7, voted for launching the greatest (in terms of par value) public issue of shares. The company projects to issue 11,540,256 securities of BGL14 each. Thus, the capital of the copper smelter will double, and almost BGL161MN will go into its funds. If the minority shareholders refrain from takng part in the procedure (as expected), the share of the Belgian company Umicore (the new name of Union Miniere) will go up from 99.96% to 99.98 per cent.The money collected after the completion of the procedures, will be used for implementing the second part of the copper smelter's investment programme. Under the contract, signed between the Privatisation Agency (PA) and Umicore in 1997, the Belgian company undertook to invest USD220MN in the enterprise's development by 2002. The investment is earmarked for increasing the production capacity of the smelting furnace in Pirdop to 220,000 tons of anode copper per year. USD70MN will be necessary for the purpose. An expansion of the workshop for sulphiric acid, which is a by-product in the production of copper, is planned as well.So, the money for the future investments will be collected. In addition, the management of Union Miniere Pirdop Med is making attempts to agree with the Government a reschedulement of the invetsments, promised in the privatisation contract. The demand is motivated by the unfavourable situation on the international markets of refined copper, which will considerably lengthen the period of return on the Belgians' investments. At a meeting, held two weeks ago, the Government decided to set up an expert group to analyse Umicore's demand, which was filed in September 2000. A permission will be probably given, despite the statement of PA's new Executive Director, who said a week ago he did not intend to turn into practice the revision through annexes of already closed privatisation contracts.The shareholders in the Pirdop-based copper smelter will be able to subscribe at its offices for shares of the voted double capital increase. They can also do that in the head office of BNP-Paribas (Bulgaria). The procedure will last one month and no extention of the term is projected if some stocks remain unsold. This means that the company's capital shall not be increased exactly by the planned BGL11,540,256 because it's hardly probbale that all minority sharholders would take part.Union Miniere Pirdop Med's shareholders also voted for two replacements in the company's Board of Directors (BoD). Philip Rombaut (who was executive director of the copper smelter till a year ago) and Alexander Alexandrov will be replaced by Thomas Beemish and Luc Delagey. Me. Beemish is a Financial Director of the Pirdop-based enterprise, and Mr. Delagey is a Director of Umicore's refinery in the Belgian town of Olen, which is the main client for the anode copper, produced in Pirdop.Apart from the capital increase, the financing of investments in the enterprise is effected in several other ways, it became clear from the report for the year 2000 of the copper smelter's managers. The company is servicing three bank loans: from Raiffeisenbank (Bulgaria), from BNP-Paribas (Bulgaria), and from Citibank, which totalled BGL36MN-plus by December 31, 2000. In addition, an intercompany loan of BGL45MN from Union Miniere International was utilized. What is interesting here is that the enterprise paid BGL7.3MN for consulting services last year.Meanwhile, Umicore's financial results for the first six months of 2001 became known. The Belgian company's operative profit amounted to EUR99.5MN, and the consolidated profit of the group (including the performnce of its subsidiaries) totalled EUR101.3MN, or EUR4.22 per share. Umicore's proceeds reached EUR1.908BN, up 2% from the same period of 2000.