Gov't to participate in Podravka recapitalisation

The government on Wednesday decided to take part in the ongoing process of injection of fresh capital into Podravka in order to retain a controlling package of shares in that leading food maker, and it will plan the sale of its stake in Podravka's equity in a more favorable period.

According to the decision made by the Zoran Milanovic cabinet, the government will inject 40 million kuna and the Croatian Pension Insurance Fund (HZMO) and the Capital Fund together HRK 68 million.

The government gave its consent for the HZMO's participation in the Podravka recapitalisation and instructed the Restructuring and Sale Centre to subscribe and pay for up to 141,000 Podravka shares.

The Koprivnica-based company's General Assembly opted in early June for an increase in the company's share capital by issuing up to 1.7 million ordinary shares worth 300 kuna each at a public offering, and it this way the food maker is set to collect up to HRK 510 million.

Prior to this decision, Podravka's stock capital, divided into 5,420,003 shares, with each having a nominal value of HRK 220, was worth HRK 1.2 billion.

The government currently holds 9.84% of Podravka's share capital, while the HZMO's interest is 10.61% and the Capital Fund holds 5.93%, which enables the government to be eligible to the subscription of 136,358 shares for which it should pay 40.9 million kuna, Economy Minister Ivan Vrdoljak said.

The cost for the HZMO will be some 44 million kuna, and the Capital Fund should allocate HRK 24 million for participation in the Podravka recapitalisation.

The current value of Podravka shares is believed to be underestimated, and it is not economically justifiable to give up from participating in the recapitalisation, the minister said, adding that the government decided that it would be better to retain a controlling package of 25% plus one share and shifting the sale of the state's interest in Podravka to a period when it would bring more money into the state budget.

The first round of a multi-round offer for subscription began on Tuesday, July 7, and will last until July 13. It is be open to employees of Podravka Group which includes also the companies Danica, Belupo and Deltis Pharm, in addition to the food producer Podravka.

The second round will be open to existing shareholders and runs from July 7 until July 20, it said, and the management will decide on July 25 whether a third round will take place.

Podravka, which expects to collect up to 510 million kuna through this recapitalisation, will use the collected funds primarily for new acquisitions, such as the takeover of the Zito food company in Slovenia, and for the construction of a new pharmaceutical factory of Belupo.

 

 

(Hina) 

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