Small shareholders of the Simo Milošević Institute can sell shares for 58 euros

The government, state funds and HTP Vila Oliva will begin buying up shares of small shareholders of the Simo Milošević Institute from Igalo next week at a price of 58 euros per share, which is the highest price at which they have been purchased on the stock exchange in the past six months, "Vijesti" has learned.

On Tuesday, the Government adopted the Information on the activities of the mandatory public takeover of shares of the "Simo Milošević" Institute, in accordance with the Restructuring Plan, and in the coming days, a joint call will be published by the Government, the Development Bank, the Employment Agency, the Health Insurance Fund and HTP Vila Oliva, which jointly own 85,66 percent of the shares, for the purchase of shares from small shareholders. There is no obligation for small shareholders to sell their shares.

The government originally planned to participate in the purchase of small shareholders, including taking over the shares of HTP Vila Oliva, but in the end it was decided that the state and this private company would jointly participate in the purchase of shares and future recapitalization of the Institute, so that it could avoid bankruptcy, pay off debts and launch an investment cycle to improve the quality of accommodation and services.

With this share buyback and future recapitalization, the Government, its funds and HTP Vila Oliva will have a steady increase in the number of their shares, which will approximately maintain the current percentages, meaning the state will not have two-thirds of ownership and will not be able to exclude the private partner from the decision-making and management process of the Institute.

Member of the Board of Directors of the Institute and representative of HTP Vila Oliva Petar Rakcevic He said that small shareholders who want to sell shares should fill out a statement with the Central Clearing and Depository Company (CKDD), in which they will provide their details and the bank account to which the money will be paid.

He says that the buyout will last 15 days and that the money will be paid to shareholders immediately upon its expiration.

A capital increase of around 21 million follows.

"According to the restructuring plan, after this procedure, a decision will be made on the recapitalization of the Institute in the value of its current liabilities, which will be around 21 million euros, of which HTP Oliva has committed to participating with seven million euros. The remaining amount will be provided by the state, and all other shareholders can participate in the recapitalization if they wish," said Rakčević.

Recapitalization is a process in which shareholders, according to the percentage of their ownership, purchase new shares from the company, at their nominal value, which for the Institute is 155 euros, and is significantly higher than the market value on the stock exchange.

"Shareholders who participate in the recapitalization will receive fewer shares for the money they invest than if they bought them on the stock exchange. However, with this recapitalization, we are saving the Institute, because it will receive the money we invest, and thus we are protecting what we have invested in it so far," said Rakčević.

Recapitalization represents financial rehabilitation and stabilization of operations through the implementation of measures that will enable the Igalo Institute to become sustainable and stable.

A year ago, he was on the verge of bankruptcy.

The Institute was on the verge of bankruptcy in June last year after its account was frozen due to a debt of seven million euros, to the bankrupt Jugobanka. At that time, it was jointly rescued by HTP Vila Oliva, which provided a loan of five million euros, and the Government paid the same amount as an advance for services that the State Health Fund's insured persons would have at the Institute.

The Institute's shareholders' assembly adopted a restructuring plan in February that envisages an offer to buy out small shareholders, multiple rounds of recapitalization of the company, as well as the sale of part of the Institute's assets that it does not use, as well as obtaining ownership rights over the state-owned land on which it was built, where it is now registered as a user.

At the request of the co-owner of HTP Vila Oliva Žarko Rakčević An amended Restructuring Plan was adopted, which envisages a significantly smaller sale of assets (only the children's department to the state for the school) significantly less than the original plan proposal, prepared by the state, as a proportional participation in the recapitalization of all shareholders, the registration of land from the state to the Institute, bringing the Institute to four stars in four years, professionalization of management, rationalization of the number of employees and all costs... All of this is estimated at a total of 88 million euros, and it is urgently necessary to provide 21,5 million euros through the first recapitalization to settle existing liabilities. The remaining amount of money will be provided through new recapitalizations, the sale of part of the assets and loans of the Institute itself.

The government and its funds now own 56,5 percent of the Institute's shares, "Vila Oliva" 29,1 percent, and other small shareholders a total of 14,4 percent of the shares.

According to the law, the highest price at which the acquirer acquired them is used.

According to the Law on Takeover of Joint Stock Companies, the price at which the acquirer (in this case the Government, state funds, HTP Vila Oliva) purchases shares must not be lower than the highest price at which the acquirer or a person related to it acquired the issuer's shares ten months prior to submitting the notification to the Capital Market Commission.

HTP Vila Oliva, as one of the group of acquirers, purchased around six thousand shares of the Institute on the stock exchange at the end of January at a price of 58 euros, and trading has continued at the same price since then. So, in terms of the law, this is the highest price at which the acquirer has acquired shares in the past ten months.

A group of small shareholders of the Institute offered their shares on the stock exchange in January at a price of 100 euros, but no one bought them. Currently, there is only one buy order for the institute's shares on the stock exchange at a price of 52,2 euros, while sell orders start at a price of 63,8 euros.

Since the announcement of the Restructuring Plan at the beginning of this year, there have been no sales of Institute shares on the stock exchange at prices higher than 58 euros. In December last year, and before that, the shares were worth 18,2 euros.

The last time the Institute's shares were worth more than 48 euros on the stock exchange was in October 2010. The Institute's shares had their highest recorded value on the stock exchange during the so-called economic boom of 2007-2008, when they were regularly bought and sold at prices of over 200 euros, with the record being in May 2007 - 326 euros.