ZAGREB (Croatia), May 20 (SeeNews) - Croatian holding group Djuro Djakovic [ZSE:DDJH] said it plans to cover part of its loss from previous years using capital reserves and subsequently reduce its capital prior to the entry of a strategic partner under its restructuring programme approved by the European Commission.
Djuro Djakovic will use all of its available capital reserves in the amount of 12.3 million kuna ($1.7 million/1.6 million euro) to cover part of the transferred loss from previous years that stood at 250 million kuna as at the the end of 2020, the company said in an invitation to its annual shareholders meeting filed with the Zagreb Stock Exchange earlier this week.
The group has no retained profit and after covering that part of the debt, its uncovered loss will be reduced to 237.7 million kuna.
Following that, it proposes to initially reduce the par value of its shares from 20 kuna to 10 kuna. Then their value will be further cut to 0.20 kuna per share and then the company will merge 50 shares into one share. As a result, its capital will be slashed to 2.03 million kuna divided into 203,064 shares with a nominal value of 10 kuna per share. Currently its capital totals 203 million kuna, divided into 10,153,230 shares with a par value of 20 kuna.
After that, the government will carry a debt-for-equity swap worth 101 million kuna to obtain 10,100,000 new shares with a nominal value of 10 kuna per share and the company's capital will reach 103.03 million kuna from 2.03 million kuna. It will be divided into 10,303,064 shares with a nominal value of 10 kuna each.
Later on, the group's shares will be merged in 2-to-1 ratio to cover losses and a consortium of Czech companies, DD Acquisition, will enter the shareholding structure of Djuro Djakovic, increasing its capital by 227 million kuna.
In December, the European Commission said it approved the Croatian government proposal to grant Djuro Djakovic a restructuring aid of 57 million euro in the form of a debt-to-equity swap and a guarantee on potential future commercial claims. The restructuring plan provides for DD Acquisition to increase the capital of Djuro Djakovic through cash and in-kind contributions of approximately 64 million euro.
The shareholders will vote on the proposed restructuring plan on June 23.
The company's shares traded unchanged at 2 kuna intraday on Friday. On Thursday, they closed 9.09% lower. Since the start of this week their price has fallen by 23%, bourse data showed.
(1 euro=7.534 Croatian kuna)