04 May 2000

Danubiana to lose its small shareholders (Capital)

Last week (April 24-29) two special transactions with Danubiana shares took place on the RASDAQ, totalling 48,350 shares, i.e. 0.73 percent of the company's share capital. The price was 4.61 fold higher than the current market quotes.

The main shareholder in Danubiana is Tofan Group SA that holds 66.15 percent of the share capital. In October 1999 the company underwent a capital increase of 34.416 billion lei as a result of a contribution in kind equalling $3.877 million. The share capital reached thus 166.3 billion lei, the Tofan Group increasing its share by 8.84 percent.

The present shareholding also includes PAS with 10.15 percent, the State Ownership Fund with 4.93 percent, Tofan Group Distribution with 1.64 percent, Pictet with 1.63 percent and small shareholders with 15.13 percent. SIF Moldova withdrew from among the significant shareholders, its share in Danubiana being 6.2 percent.

Danubiana - headquartered in Bucharest - manufactures tires mainly for farming machinery but also for lorries. Since 1997 the domestic market that absorbed 80 percent of the company's output entered a downward trend, which obliged Danubiana to turn to the foreign market. Thus, 80 percent of its production is exported both in the USA and Europe.

The 1999 turnover of the company was $60 million, with a gross profit of $200,000. Nevertheless, investments could not be recouped, therefore the financial year closed with zero profit. For 2000 the investment program was budgeted at $5 million with two percent profit rate. The estimated turnover in 2000 is $60-65 million, while the labour productivity will increase 10 percent as compared to 1999.

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