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Dec 04, 2007 17:30 EEST
STARA ZAGORA (Bulgaria), December 4 (SeeNews) – Bulgarian producer of pre-cast reinforced concrete structures ZSK Boruy will decide in the next six months when and how to list on the Sofia bourse to back its investment plans, the company’s financial manager said.
“Most probably (…) the company will be transformed into a holding structure and it will be decided later which one of its components will be listed on the stock exchange,” Rumen Velkovski told SeeNews in a recent interview. “Undoubtedly, this is the most attractive and the cheapest way of financing,” he said.
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ZSK Boruy has subsidiaries active in the real estate sector and the construction business.
An increasing number of Bulgarian companies find listing on the stock exchange in Sofia an attractive source of financing. The bourse has become very popular among domestic and foreign investors in the past year, following the country’s accession to the European Union in January.
“Most probably, it will be new shares but it must also be seen whether the current owners will want to divest of part of their shares,” Velkovski said.
ZSK Boruy is 77.7%-owned by construction materials trader Stroymat and the rest is owned by individual investors. The company has share capital of 475,000 levs, divided into the same number of shares.
Velkovski said that a strategic plan for the company’s development in the following five to seven years will be prepared in a month or two.
ZSK Boruy current investment plan envisages spending up to 20 million levs ($15 million/10.2 million euro) on buying new machines by 2013, he added. Whether the company would build a new plant or upgrade its existing one, located in the central Bulgarian city of Stara Zagora, is yet to be decided.
ZSK Boruy currently produces some 7,000-8,000 cubic metres of reinforced steel per year and 30,000 cubic metres of concrete per year. Following the upgrades, the capacity is seen rising to 14,000-15,000 cubic metres of reinforced steel per year and 60,000 cubic metres of concrete per year in 2013.
ZSK Boruy sells its products domestically and so far has no plans to export them, Velkovski said.
The company, which sells its products and services to large retailers building stores throughout the country, counts on an expanding market to sustain its own development, Velkovski said.
German Kaufland, Metro Cash & Carry, HIT and Billa are some of the retailers present on the Bulgarian market. French group Carrefour has recently started the construction of its first store in Bulgaria, while Germany's Lidl and Slovenia's Mercator are still considering entering, attracted by prospects for growth as incomes of Bulgarians are rising.
“The construction sector will keep growing in the following five – six years if no cataclysm happens, especially the segment of pre-cast reinforced concrete units,” he said. ZSK Boruy sees its turnover rising to some 13-14 million levs this year from little below 10 million levs for 2006.
Net profit is expected to reach about 1.0 million levs, compared to around 900,000 levs last year.
“The idea is to enter the top 100 of construction companies in Bulgaria in terms of turnover and profit. [That would mean having] 70-80 million levs of turnover and it is achievable within four to five years ,” he added.
Velkovski said yearly net profit is expected to reach 7.0 million to 10 million levs in that period.
ZSK Boruy (www.zsk-bg.com) has been selling part of its production to retailers like Austrian DIY chain bauMax, which is currently expanding in Bulgaria, Kaufland and consumer electronics retail chain Technopolis. Swiss manufacturer of tools and metal assemblies Oskar Ruegg and coal mining and electricity generating complex Maritsa East located in southern Bulgaria are also among its clients.
(1 euro = 1.95583 Bulgarian levs)
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