EBRD to own 20% of Garagah Cement stocks

Business Materials 1 April 2006 10:17 (UTC +04:00)

European Bank for Reconstruction and Development (EBRD) will purchase 20% of the stock packet of Swiss company Holcim, which has privatized Garadag-cement in 1999, the factory `s Director General, Uve Kehler told Trend. 89, 4% of stocks are owned by the company and the rest by small stock holders, he said.

The total cost of the deal is $10m; it will be approved at the EBRD Council of Directors `s meeting on April 25. EuroBank is also planning to become a medium-term stock holder of the company, for 5-7 years term, Kehler said. He is confident that the bank will sell its first stock packet to the Holcim.

EBRRD finances will be spent to install an electro-statistic filter to the acting oven. In general, $100-110m will be invested in the cement factory reconstruction, in case if the new oven would have to be build. We are planning to achieve European ecological standards by 2010, Kehler said.

More than $40m were invested in the Garadag-cement since it was privatized; $30m of them came in the form of credit from the mother company Holcim. $5m of them yet have to be returned.

The last year was very profitable for the factory; its annual income reached $32m with 30% growth, the similar results are expected in 2006. Although, last year no dividends were paid due to the some problems- additional taxes and other expenditures. However, the factory` s director did not exclude the possibility that this year they will be paid. Production growth will also get reduced till the last year level- 1,3 million tons of cement.