- CHANGE OF STRATEGY WITH EMPHASIS ON SHARE VALUE APPRECIATION
- SHARE CAPITAL INCREASE OF €256.7m
- CONVERTIBLE BOND LOAN ISSUANCE OF €684.7m
The Board of Directors of MARFIN INVESTMENT GROUP HOLDINGS SA ('MIG', the 'Company' or the 'Group') decided in its meeting today to proceed with the capital strengthening of the Group in order to take advantage of existing investment opportunities as well as those that are expected to emerge through the end of 2011. More specifically, the Board decided the following:
1. A share capital increase of €256,776,061, with pre-emption rights to existing shareholders, through the issuance of one (1) new share for each three (3) existing shares at the price of one (1) euro per share. It should be noted that approval for this issuance has been granted already by a previous General Shareholders Meeting. The issue price represents a small premium to the current market price of MIG; it represents however, a significant discount of more than 60% to the Company's NAV per share as it stands at year-end 2010.
2. Issuance of a convertible bond loan ('CBL') of up to €684,736,164 with pre-emption rights to existing shareholders through the issuance of two (2) bonds for each three (3) outstanding shares of the Company, including the shares following completion of the abovementioned share capital increase. The nominal value of these bonds will be one (1) euro. The issuance of the CBL is subject to the approval of MIG's General Shareholders Meeting, which will be convened promptly. The final terms of the CBL (maturity, coupon, conversion price etc.) will be determined and approved by the General Shareholders Meeting following recommendation by the Board of Directors after consultation with the Company's investment banking advisors. The advisors may also be engaged to place any unsubscribed portion of the issuance, if any.
Further information regarding details of both issues of a total size of €941,512,226 will be given during next week's presentation of financial results by the Company.
Commenting on the aforementioned decisions of the Board, MIG's Chairman Mr. Andreas Vgenopoulos made the following statement:
"During the economic downturn of 2008-10 MIG adopted a defensive strategy, placing emphasis on market share as well as on preserving and strengthening the portfolio companies position in their respective markets. That was combined with an extensive programme of portfolio rationalization at the group level as well as cost containment at the individual company level. These initiatives allowed the group to maintain a strong capital position and high levels of liquidity amounting currently to approximately €500m.
Despite the reported reduction of its NAV, the Company's strategy has been validated as it has enabled the company to maintain a solid operational and capital base which will allow it to take advantage of the expected improving cyclical and structural trends with a view to realizing the true potential of its investments.
Entering into what we believe is the last phase of this cyclical downturn, we expect to see significant investment opportunities emerging. Amongst others, the extensive government privatization programme as well as the potential disposals of non-core assets by domestic and regional financial institutions will create significant investment opportunities across a number of the Group's key sectors.
The decisions adopted in today's board signal the group's strategic shift towards placing emphasis on enhancing and crystallizing the value of its investments whilst creating significant medium-term upside in shareholder value. We firmly believe that we will soon, and once again, prove to our shareholders that they were right in entrusting us."