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Bulgaria's Chimiport IPO coming in September

Mon, Aug 21 2006 09:00 CET

byIvan Vatahov

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Bulgarian industrial conglomerate Chimimport said on August 10 it planned to float shares worth about 44.3 million leva (22.6 million euro) in an initial public offering (IPO) in early September.

Brokers anticipate strong interest.

"It is sure that the demand will exceed the supply," Kiril Ivanov, trader with local Yug Market brokerage, said, quoted by the SEE News news service.

"I expect a huge interest as there are a lot of free funds," he said.

Chimimport received on August 9 approval from Bulgaria's financial watchdog, the Financial Supervision Commission, to float 11 083 914 shares with an issue price of four leva each in the IPO on the Bulgarian Stock Exchange - Sofia. 

"We plan the beginning of September, maybe September 7, to be the first day for subscription of new shares," Chimimport board member Alexander Kerezov said.

The shares, with a face value of one lev each, will be issued as a result of the increase of the company's capital to 130 million leva from 118.9 million leva.

"The raised funds will be used for the capital increase of Central Co-operative Bank (CCB), and establishment of a life insurance and a health insurance company," Kerezov said.

He added that Chimimport's objective was to start providing full range of financial services, including general, life, health, pension insurance and banking services.

CCB, part of the conglomerate, plans to raise its share capital to 72.76 million leva from 48.51 million leva to boost its credit portfolio and expand its branch network.

Chimimport controls several companies listed on the Bulgarian Stock Exchange - Sofia, including CCB, oil and gas prospecting company Prouchvane I Dobiv Na Neft I Gaz, Black Sea resort operator St Constantine and Elena, fruit and vegetables trader Varna-Plod and rubber producer Kauchuk, which enjoy strong investor interest.

Chimimport is active in the financial, transport, manufacturing and trade sectors in addition to legal, accounting, consultancy and advertising services. It has 44 subsidiaries.

Chimimport  is 98.1 per cent owned by holding company Chimimport Invest.

The company has been very active in Bulgaria's economy especially in the past one to two years.

The Cabinet on June 29 approved the sale of its 70 per cent stake in Bulgarian River Shipping Corporation (BRSC) to Chimimport for 22 million leva (11.3 million euro).
Chimimport already owned almost all of the remaining 30 per cent in BRSC, which the Government sold on the Bulgarian Stock Exchange - Sofia in 2004.

Chimimport has pledged to invest 25 million euro in BRSC over a five-year period and raise the BRSC staff to 731 from the current 571.

It also participates in the procedure for the privatisation of the country's flag carrier Bulgaria Air through Balkan Hemus Group, which is wholly-owned by Chimimport.

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