IT equipment retailer and distributor Flamingo International intends to increase its share capital by 43.5 million RON (more than 12.3 million euros), by incorporating the capital premiums and the reserves made from last year''s profits. As a result, the company''s capital will increase six-fold, from 8.7 million RON (2.47 million euros) to 52.2 million RON (14.8 million euros).
Every Flamingo shareholder registered with the shareholder registry prior to the reference date (to be set during the General Meeting of Shareholders) will receive 5 bonus shares for every share currently held. Each of these new shares will have a par value of 0.1 RON. The board of directors has suggested October 3, 2005 as the reference date.
This capital increase is based on the issue premiums, collected during the initial public offering of the company, which are worth 43 million RON (12.2 million euros). On top of this come the company''s profit reserves, as shown in the balance sheet for the end of 2004, which stand at 0.5 million RON (142,000 euros).
The capital increase will help the company meet the criteria for its listing on the first tier of the Bucharest Stock Exchange (BSE), which requires a minimum share capital of 8 million euros. The company is also planning to increase its number of shareholders to 1,800, which is also required for promotion to the first tier.
Flamingo International is the first ITC company to have been listed on the Bucharest Stock Exchange (initially on the second tier), after its initial public offering (conducted at the end of June 2005). It put out 19.55 million shares with a par value of 0.1 RON per share and received 2.3 RON per share.
Flamingo International''s IPO attracted some 800 bidders, 40 of which are foreign institutional investors, which subscribed 70% of the total.
While the public offering was a success, being oversubscribed 3.7 times, the performance of Flamingo''s shares on the Stock Exchange has not been so successful. After its first day of trading, when Flamingo peaked at 2.76 RON/share and saw a traded volume of 3 million RON (0.85 million euros), the quote stabilised at around 2.4 RON/share. Flamingo last traded for 2.37 RON, while its market capitalisation has now exceeded 60 million euros.
Flamingo made net profits last year of 3.65 million euros, up from 2.9 million euros in 2003.
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