Bulgarian Chemical Co Polimeri To Hike Capital Despite Cancellation Call by Minority Shareholder

"Polimeri's general shareholders' meeting [held on June 30] does not cancel the decision of the managers' board from February 28, 2008 for the increase of company's capital," the company said in a filing with the Bulgarian Stock Exchange’s information service X3 News.

Polimeri, which has a share capital of 5.32 million levs ($4.26 million/2.72 million euro), planned to issue and offer for subscription 50 million new shares at an issue price equal to their face value of 1.0 lev each. However, Bulgaria's financial regulator said it will not endorse the plan as the proposed issue price is much lower than the shares’ book value and could cause a dilution of the capital that would hurt investors’ interests.

In May Polimeri said it would stick to its plan to raise capital but will revise the issue price. On the same day Bulgarian Holding Company (BHC), a former privatisation fund that owns 11% of Polimeri, said in a statement it would seek the cancellation of the plan without giving reasons.

Polimeri officials were not immediately available on Tuesday to elaborate on the revision of the issue price.

Polimeri, set up in 1961, is headquartered in the town of Devnya, in northeastern Bulgaria. In July 2006, the company approved a 186.5 million euro ($292.1 million) investment programme to replace its ageing equipment and catch up with the European Union’s energy and resource efficiency standards by 2011.

Shares in the company closed at 4.35 levs on Tuesday, 4.8% up from Friday.