The tense relations between the major shareholders of Ellaktor were reflected in comments made by CEO Aris Xenofos yesterday.
In a teleconference with analysts, where the plan for a 120 million euro share capital increase was presented, Xenofos stressed that the management considers that Ellaktor has a strong shareholder base and is confident that they "will support the share capital increase at the next general assembly ". He added that "we do not want to prejudge their decisions, but we are sure they will support it." The capital increase will be discussed at the extraordinary general meeting on April 2.
In order to address concerns from shareholders Giannis Kaimenakis and Dimitris Bakou concerning the insufficient justification for the share capital hike, Xenofos stressed that the proposal "is the result of a detailed study in relation to the development of projects and liquidity needs. We are sure that it reflects the current needs of the group." The two shipowners control about 25 percent of Ellaktor’s voting rights and can block, with the help of friendly forces, the capital boost.
Asked by an analyst about what will happen if the increase is not approved and if there is a commitment from major shareholders (ie the Dutch Reggeborgh) on participating, the CEO said that "we do not want to prejudge their decisions but we are sure they will support it." Xenofos added that "we as an administration have proposed a capital increase based on specific data that we have studied recently. At the moment, the issue is not what the shareholders want, an issue we will know about in a few weeks. The capital increase is necessary and we suggest that all shareholders support it ".
Recovery of construction arm
The head of Ellaktor yesterday referred extensively to the plan for a final consolidation of the construction arm, ie the subsidiary Aktor which is being supported by other group activities presenting significant operating profitability, such as concessions and renewable energy sources (RES). Xenofos announced that management is seeking interim funding to meet Aktor’s pressing liquidity needs without announcing the amount. He said that, in all probability, a bond loan will be issued by Aktor Concessions.
The presentation to analysts showed that during the first quarter of the year Aktor needed 13 million euros, while it still has large debts to suppliers and subcontractors. Xenofos spoke about renegotiating contracts and other measures to further reduce costs to the group’s construction arm.
Need for interim financing
Interim financing is necessary, as the capital increase, will not be complete before June, even if all major shareholders participate in it.
The head of Ellaktor was also asked if there is a plan to sell Aktor and replied that "in no case do we have such an intention". He believes that with the completion of the capital increase, the "black holes" in projects will be permanently closed.
As the administration has explained, the fresh funds from the capital increase will be allocated as follows: 45 million euros will cover losses and liabilities from international contracts, mainly in photovoltaics, while 55 million euros will repay obligations to suppliers and subcontractors to start critical projects.. The Renewable Energy Sources (RES) sector will also be financed with 20.5 million euros to accelerate investment plans. The outstanding balance on signed contracts by the group reaches 1.6 billion euros.