Businessman Ioan Popa, owner of Alba-Iulia-based Transavia - one of the biggest domestic poultry producers, which reported a 42m-euro turnover last year, plans to acquire an over 50% stake in Avicola Brasov, a company whose market capitalisation is worth 8.4m euros.
"I had held a stake (below 5%) in Avicola Brasov for some time, but after the capital increase of 18m RON (5.8m euros) in Avicola, approved yesterday by the general assembly of shareholders, I hope to gain stake worth more than 50%," stated Ioan Popa, owner of Transavia Alba-Iulia.
Avicola Brasov is held by the employees' association, which holds 55% of the stock, whilst SIF Transilvania owns 13% in the company.
Avicola Brasov (AVLE) last year reported a turnover worth 14.2m euros, up 8% in euros from 2005, while the company's income fell by more than three times, to 210,000 euros.
Last year, poultry producers' profits registered dramatic declines because of the bird flu epidemic. As a result, Transavia only generated net income of 5.5m euros, although it had budgeted 8.5m euros, while Agricola Bacau derived a net profit of one million euros and a 70m-euro turnover.
Avicola Buzau, one of the main Avicola units on the domestic market, saw its income shrink from 2.1m euros in 2005 to less than 300,000 euros last year.
Transavia is one of the most dynamic players on the market of poultry producers and is operated as a family business by Ioan Popa, who started the company from scratch.
"The acquisition is part of my expansion plans, and even if I have to put forward all my money to acquire more than 50% of the shares, I will do it," says Popa.
The businessman added another 5m euros to Transavia's share capital this year. If he were to gain control of Avicola Brasov, Ioan Popa would close-in on his main competitor, Avicola Bacau, the largest player on the market in terms of turnover in 2006.
The capital increase, from around 1.6 million euros to more than 7.4 million euros, has been recently approved by the General Meeting of Shareholders, with shareholders to subscribe in a maximum of 30 days after the decision date, which will be published in the Official Gazette.
On the stock market, Avicola Brasov shares traded at 13.5 RON/share at the end of last week, with shareholders able to subscribe to the capital increase at a face value of 2.5 RON/share.
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