Zeritis Group explores sale of Belovo Paper Mill (NEUTRAL)

The Greek tissue-paper manufacturer Zeritis Group is exploring the sale of its Bulgarian unit Belovo Paper Mill, Mergermarket reported citing two sources familiar with the situation. Belowo is still listed on BSE but the Board of Directors called an EGM to vote on delisting of the company from the register of public companies. Recall that the direct majority shareholder (Pabolux S.A.) concluded a tender offer to the minority shareholders at BGN 2.25. Pabolux controlled 92.4% of shareholder’s equity before the deal and increased its ownership in the company by 0.55 p.p. In order to have a valid decision, the delisting should be approved by at least 50% of the minority stakes (3.8% stake) before the extension of the tender offer. Note that the tender offer was approved by the Financial Supervision Commission in the beginning of September and according to the strategic plans of the offeror there were not any envisioned changes of control as of the date of the registration of the tender offer. Belovo Paper Mill generated 2017 revenues of 27.6m, up 7.9% YoY while its net loss widened by 72.5% YoY to BGN 1.5m.