Elektrim shareholders satisfied with deal
By : Roseanne Gerin
Minority institutional shareholders of Elektrim (http://www.elektrim.pl) last week said they were pleased with the company's deal with Vivendi Universal (http://www.vivendi.com), but remain uncertain about the direction of the telecom and power conglomerate due to a lack of information.
Investors said they liked the deal since it reduced uncertainty about Elektrim's future and improved its financial situation, especially with its cash-flow drought and debt load estimated at more than $800 million.
"We are definitely happy that the uncertainty of the future financing of the company has been reduced," said Krzysztof Stupnicki, the general manager of ING Asset Management, which holds 0.5-1% of Elektrim's shares on behalf of other financial institutions.
But Stupnicki said investors received second-hand information about the deal from press reports, some of which appeared contradictory, and are calling for more direct disclosure of the agreement's financial consequences from Elektrim and Vivendi.
"We want a statement that the transaction, once completed, will improve the cash flow by X (amount)," Stupnicki said.
In late June Elektrim's supervisory board agreed to sell the firm's fixed-line telecom and Internet-related businesses to Vivendi in a deal totaling e589 million. The French also agreed to issue Elektrim a one-year e120 million loan. Elektrim's official statement issued on June 27 said the companies would provide a written statement within 15 days announcing a joint business plan for Elektrim's fixed-line assets. Ewa Bojar, Elektrim's spokeswoman, could not be reached for further comment last week.
Because the Vivendi deal had already been rubberstamped by Elektrim's supervisory board and did not require shareholder approval, details were not discussed at the Polish company's extraordinary general shareholders meeting (GSM) on June 30, investors said. They added they have been left in the dark about what will happen next.
"There are still some details that need to be hammered out," said an employee of another of Elektrim's minority financial shareholders, who requested anonymity. "The devil's always in the details. Although (the deal) has been approved conceptually, it needs to be fully executed."
Stupnicki said he would like to see a document signed by Elektrim's management and supervisory boards that information about the Vivendi deal "is a true and complete description of the deal and there are no hidden appendices." He also said the two companies should inform shareholders about the topics and dates of their future meetings.
Nevertheless, some shareholders indicated they are confident that Elektrim's new supervisory board will employ a transparent process, especially in its forthcoming selection of the firm's management board.
"We believe that the supervisory board will use professional consulting services to present candidates," said one source, adding that Elektrim has not disclosed when it would begin the selection process.
