Option to increase stake in Policolor SA

    RNS Number : 7945W
  Reconstruction Capital II Ltd
  16 June 2008
   

    Reconstruction Capital II Limited

    16th June 2008

    RC2 enters into option agreement to increase its stake in Policolor S.A.

    Reconstruction Capital II Limited ("RC2") is pleased to announce that it has signed a put and call option agreement (the "Option")
which, if exercised, will increase its stake in Policolor S.A. ("Policolor" or the "Company"), the leading producer of coatings in Romania
and Bulgaria.  RC2 already owns a 9.2% shareholding in Policolor.

    Quoted on the Bucharest Stock Exchange, with a market capitalisation of EUR68m (based on the closing share price on 12th June 2008), and
based in Bucharest, Policolor had non-consolidated sales of EUR47m and incurred a net loss of EUR3m in 2007. It operates in Bulgaria through
its 64.2% owned subsidiary Orgachim AD, a producer of coatings and specialty chemicals.  Orgachim had sales of EUR64.5m and a net profit of
EUR3.5m in 2007 and is listed on the Bulgarian Stock Exchange.

    The Option, which was entered into between RC2 and the Romanian Investment Fund ("RIF") on the one hand, and the Romanian American
Enterprise Fund ("RAEF") on the other, will, if exercised, allow RC2 to purchase a shareholding of 25.1% in Policolor for EUR20.9m, or
EUR1.1648 per share.  

    It is intended that by exercising the Option, RC2 and RIF shall buy RAEF's 33.2% shareholding in Policolor for a total consideration of
EUR 27.6m, bringing the two funds' stakes in the business to 92.5%.  Under Romanian securities rules, following the exercise of the Option,
the two funds will have different possibilities to squeeze out the remaining shareholders and de-list the company. Following this operation,
it is intended that RC2 will have a 40% shareholding in Policolor and RIF a 60% shareholding.

    Ion Florescu, a director of RC2 and Policolor's chairman since 2002, commented "By consolidating the ownership structure in the Company,
both RC2 and RIF will have the opportunity to work together closely in order to accelerate and finalize the de-listing of Policolor as well
as the re-organization of the entire group in preparation for an exit". 


    For further information, please contact:
    Reconstruction Capital II Limited
    Ion Florescu
    Tel: [phone]

    Grant Thornton Corporate Finance (Nominated Adviser)
    Philip Secrett
    Tel: [phone]
    
LCF Edmond de Rothschild Securities (Broker)
    Hiroshi Funaki / Claire Heathfield
    Tel: [phone]

This information is provided by RNS
The company news service from the London Stock Exchange
 
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