Monday, May 19, 2008

Merger of Pol-Aqua, Polnord to be decided on in 2-3 weeks.

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Merger of Pol-Aqua, Polnord to be decided on in 2-3 weeks. The decision on the possible merger of construction firm Pol-Aqua with the blue-chip developer Polnord, after Pol-Aqua buys 20% in Polnord, will be made within a maximum of 2-3 weeks, Pol-Aqua's CEO Marek Stefanski said. He added that the decision depends chiefly on the acceptance of the merger by Pol-Aqua's financial shareholders, which for example do not wish Prokom Investments to remain Pol-Aqua's shareholder after the merger with Polnord. Another issue raised by the CU OFE, BZ WBK AIB AM and ING OFE funds, which hold together over 15% in Pol-Aqua, is the price. In the preliminary agreement, a 1.45 parity was included, while Pol-Aqua's financial shareholders do not agree to it and expect less Pol-Aqua shares to equal one Polnord share in the merger. Stefanski announced that the share exchange parity would be lowered from the present level. In late April, the CEO said that Pol-Aqua was only interested in a full merger with Polnord and if the complete transaction is not finalised, the company will withdraw from the process. Pol-Aqua announced at that time that it had signed a conditional deal on the purchase of 20% in Polnord from Prokom Investments for PLN 399.95 mln (EUR 117mn). Should the deal be completed, which should take place by Jul 21, Pol-Aqua will propose a merger of the two companies. The merger will lead to the setting up the one of the biggest construction groups in Poland , dealing with construction services in the scope of engineering, general execution and development. Pol-Aqua is to conduct a secondary public offering, if it wins a contract to build a motorway strip in Ukraine , Stefanski told the news agency ISB . The CEO said earlier during a press conference that Pol-Aqua had submitted its offer, in a consortium in which it held a 55% stake, to build 84km of motorway Krakowiec-Lvov worth of a total of EUR 1bn. However, the licence for the construction went to its competitor. But the winner had problems with financing the investment and its bid may become invalid. Pol-Aqua has closed the motorway project’s financing and counts on reaching an agreement with the competitor in order to join forces and conduct the construction together. The CEO stressed that Pol-Aqua would keep its stake worth EUR 500mn in the project. Pol-Aqua posted PLN 7.36mn consolidated net profit written to the shareholders of majority stakes in Q1 against PLN 3.92mn a year earlier. Consolidated revenue was PLN 207.91mn compared with PLN 68.52mn. ISB, tom

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Merger of Pol-Aqua, Polnord to be decided on in 2-3 weeks.

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