Letter of the President of INTRACOM GROUP, Mr. S. Kokkalis to the President of the Athens Stock Exchange, Mr. P. Alexakis.

A large number of companies, five of which are listed on the Athens Stock Exchange, belong to INTRACOM S.A. Group.

The departments of the Athens Stock Exchange, diligently applying the relevant rules, have addressed the Administration of INTRACOM S.A. in the past, in written, requesting explanations and clarifications relevant to various articles, published in the press, that have not been substantiated. The response of INTRACOM S.A. has always been prompt and complete.

It is also known that, especially recently, the Athens Stock Exchange is making serious efforts to show particular care as regards the protection of shareholders from wrong and misleading information regarding the listed companies.

This is, of course, a positive fact and a condition for the upgrading of the Greek Capital Market and its classification among the mature markets.

However, the offense of misleading the investing public does not consist, only, of presenting false positive data, through which the presentation of a better picture of a company is pursued, (current financial status and prospects), with the objective to attract investors, but also, of the misleading presentation of false negative data regarding the financial status and prospects of a company in order to mislead the investing public and make it start to sell the securities it holds, so that the parties that exercise the misrepresentation may buy the shares at a price much lower than normal.

Recently, part of the press, led by the newspaper ‘KATHIMERINI', printed a large number of articles that give a completely wrong and misleading picture compared to the financial status of INTRACOM S.A., its prospects and plans.

The first false picture consists of the fact that INTRACOM S.A. and the Group, in general, is at a stage of excess borrowing.

In reality, INTRACOM S.A. and the Group are financially strong having significant financial reserves at their disposal.

More specifically:

  • · In accordance with the recently released consolidated financial reports of INTRACOM S.A. for the first nine months of the fiscal year 2001, which have been submitted to the competent departments of the Athens Stock Exchange, the total assets amount to GRD 529.2 billion, increased by 19%.
  • · The appreciation that results from the holdings of INTRACOM S.A. to the listed companies PANAFON S.A., INTRACOM CONSTRUCTIONS S.A. and UNIBRAIN S.A. is very significant, especially under the far from positive stock market circumstances, and it amounts to approximately GRD 130 billion.
  • · The INTRACOM S.A. Group own capital amounts to GRD 192.4 billion, particularly high for the Greek industry.
  • · The Group's claims and cash reserves (GRD 218.9 billion), cover in excess the short term liabilities (GRD 213.9 billion) and the total outstanding assets (GRD 327.1 billion) surpass the total liabilities (GRD 287.5 billion).
  • · Net borrowing (GRD 118.4 billion) falls significantly short of own capital (GRD 192.4 billion) with the result the ratio of net borrowing to own capital to amount to 61.5% in the first nine months of the fiscal year 2001, a figure that shows the strong capital structure of the Group. In addition, the healthy capital structure is also confirmed by the ratio of the coverage of interest. More specifically, the amount of profit covers the net financial expenses 6 times.
The second false picture that the said articles present is the negative company prospects due to the fact that, because of the deregulation of the market of telecommunications, it will lose the preferential status that allegedly enjoys by one of its clients and namely the HELLENIC TELECOM. ORGANIZATION S.A.

In reality the following apply:

  • · INTRACOM S.A. never had, does not pursue and cannot have any preferential treatment by the HELLENIC TELECOM. ORGANIZATION S.A. or any other of its clients. Consequently, it cannotlose something it never had and cannot have.
  • · On the contrary, the deregulation of the market of telecommunications, which is in full process in Greece and internationally, it has caused and continues to cause the establishment of many new companies that will provide telecommunications services, thus leading to a significant increase of the actual and prospective clients of INTRACOM S.A.
The non-executed signed agreements of the company amount to approximately GRD 480 billion, a fact that strengthens the company forecast of significant rates of increase in the following years.
  • · INTRACOM S.A. is currently one of the largest companies of tele · information systems and telecommunications in Europe, as since its establishment in 1977 it succeeded to be a multinational company activating in approximately 50 countries.
  • · The excellent competitiveness of INTRACOM S.A. was proven in the present and obviously temporary period of crisis in the sector of production and distribution of products of telecommunications and information systems, during which large companies, such as CISCO, ERICSSON, NORTEL, MARCONI, ALCATEL etc. present a reduction of turnover and profitability and proceed to lay offs, while, on the contrary, INTRACOM S.A. presents a significant increase of turnover and profit and proceeds to a proportionate increase of staff (Said data result from the recently published summary accounting reports of the first nine months of the current fiscal year).
This data, in conjunction with the delayed but unavoidable introduction of new and more expensive technology by the companies that provide telecommunications services, give an idea not only as regards the secure future of the Group, but as regards the drastic increase and expansion of its activities internationally, as well.

All the above are also confirmed by the reports of international investment firms that were released in the year 2001, as regards INTRACOM S.A. (SALOMON SMITH BARNEY (July 2001, August 2001), HSBC (October 2001), MERILL LYNCH (June 2001, November 2001), ING BARINGS (March 2001)), as well as of Greek financial companies [ALPHA BROKERAGE (December 2001), MARFIN HELLENIC (December 2001), SIGMA SECURITIES (November 2001), NATIONAL SECURITIES (March 2001), EFG EUROBANK SECURITIES (March 2001), EGNATIA SECURITIES (March 2001)], which propose the acquisition of company securities.

The company deemed necessary to communicate the above data, in order to document beyond any doubt that the misleading articles are, indeed, an effort to mislead the investing public, the main objective of which is to force the small investors to sell the securities they hold and thus create positive circumstances for their acquisition by others, a fact that became a reality in the three days that followed the printing of the articles.

The company believes that the Athens Stock Exchange must examine the possibility to take measures that will protect the listed companies and the investors from such representation.

The stock market authorities should not be a spectator of the selective and systematic slander and defamation of a Group with such a long, and successful participation to the stock market and the economy in general by a specific newspaper.


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