July 23 (SeeNews) - Croatian textile company Varteks [ZSE:VART] said its planned capital increase has attracted the interest of a large number of investors, which is enough to meet the success threshold of a new share issue equivalent to 25% of its current capital.
Moreover, the interest coming from a single unnamed institutional investor already surpasses Varteks' minimum investment requirements, the company said in a filing to the Zagreb bourse on Monday, adding the investor would like to first make a detailed examination of the company's state and operations.
"The company is considering the possibility to agree to this, in line with all regulations and after hiring an investment consultant," Varteks said.
Yet, since Varteks wants to provide equal treatment to all investors who had indicated their interest in the planned capital hike with, it will also allow any other interested investors to examine its operations. Therefore, it will invite all interested parties to declare shortly their wish to participate in the process.
Earlier this month, Vartex invited potential investors to show interest in the capital hike intended to support liquidity needs. Varteks has said it plans to issue up to 1,026,671 new shares, which equals 25% of the existing 4,106,686 stocks of 10 kuna ($1.51/1.35 euro) in par value each.
Interested investors were asked to provide the overall amount they plan to invest and the amount per share, considering the share's nominal value is 10 kuna.
Varteks has said it would give up the plan if the overall interest of potential investors is lower than 10 million kuna, or if the offered price per share is lower than 16.9 kuna, which was the stock's average price in Zagreb in the past three months.
Varteks shares jumped 8.63% to 21.4 kuna on Monday when the announcement was made.
The company has said insufficient liquidity remains its biggest problem. It believes that the new share issue will help the company meet its liquidity needs. It needs fresh funds to finance maturing debt and working capital.
Vartex expects to narrow its after-tax loss to 100,000 kuna this year from 24 million kuna in 2018 thanks to an anticipated rise of 60% in retail sales revenue. Retail sales revenue already soared 90% and 92% on the year in the first and second quarter of 2019, respectively.
Varteks, Croatia’s leading garment manufacturing and sales company, was founded in 1918. Its own brands include Phillipe Vartin, Luis Fabre, Edora, Focus, Varteks International, and Di Caprio.
(1 euro = 7.39104 kuna)