RESUME
IPO Prospectus
INDUSTRIAL HOLDING BULGARIAPLC
Type of securities offered: / ordinary dematerialized freely transferrable registered sharesNumber of securities offered: / 14,585,372
Issue value per share: / BGN 1.40
This Resume shall be considered an introduction to the IPO Prospectus. The Resume contains summarized information, which can be found in the other two parts of the prospectus – the Registration Document and the Securities Document. The Resume may not contain all information that is important to the investors. It is in the investors’ interest to be acquainted with the whole IPO Prospectus, in particular the Registration Document and the Securities Document, along with all appendices and documents, which they refer, if there are such, before they make an investment decision.
The investors must bear in mind that in case of a claim concerning the content of the IPO Prospectus, they may become obliged to cover the expenses for translation of the IPO Prospectus in the organized legal trial. The people who have prepared the present Resume, including its translation, are responsible for damages only in case the information contained in it is misleading, untrue or contradicts other parts of the IPO Prospectus.
This IPO Prospectus of Industrial Holding BulgariaPLC has been confirmed by the Financial Supervision Commission with Decision № 186-Е/26.03.2010, which does not mean that the Commission approves or disapproves investments in securities or bears responsibility for the truthfulness of the information presented herein.
The members of the Management Board of Industrial Holding Bulgaria PLC are jointly liable for any damages caused by untruthful, misleading or incomplete data in the whole Resume. The persons, who have prepared the Financial Statements of the Issuer, are jointly liable with the persons specified in the preceding paragraph for any damages caused by untruthful, misleading or incomplete data in the Financial Statements and the registered auditor – for any damages caused by the Financial Statements audited by the auditor.
22February 2010
1
/ ResumeInvestors interested in the securities offered may get acquainted with the original of and obtain a free-of-charge copy of or additional information about this Registration Document at the offices of:
The Issuer / Industrial Holding BulgariaPLC/ Address: / 47 Vasil Levski Boulevard
1000 Sofia
Telephone: / +359 2 980 71 01
Fax: / +359 2 980 70 72
E-mail: /
Website: /
Contact person: / Bogomila Ivanova Hristova
Investor Relations Director
9.00 h – 17.00 h
The Investment Intermediary / KBC Securities N.V. – Bulgaria Branch
/ Address: / Entrance 2, 22 Gotse Delchev Boulevard
1404 Sofia
Telephone: / +359 2 858 33 11
Fax: / +359 2 808 59 98
E-mail: /
Website: /
Contact person: / Tanya Vasileva
9.00 h – 18.00 h
This Registration Document may be found at – the website of Industrial Holding Bulgaria PLC and at – the website of KBC Securities N.V. – Bulgaria Branch.
Industrial Holding Bulgaria PLC and the authorized investment intermediary KBC Securities N.V. – Bulgaria Branch hereby inform potential investors that investments in the offered securities bear certain risks. The risk factors are described in item 2. Risk factors in the Securities Document and item 4. Risk factors in the Registration Document.
Table of contents
RESUME OF THE OFFERING
1. RESPONSIBLE PERSONS
2. key information
3. Use of proceeds
4. Risk factors
5. INFORMATION ABOUT THE ISSUER
6. Core activities
7. Competitiveness position of the Issuer
8. Financial and operation results
9. CAPITAL RESOURCES
10. major trends
11. Management Board and Supervisory Board
12.PERSONNEL
13. Majority shareholders
14.Financial information
15.Terms of the offering
1
/ ResumeRESUME OF THE OFFERING
Issuer / Industrial Holding Bulgaria PLC (“The Issuer")Issue / 14,585,372 regular, dematerialized, freely transferable and registered shares
Issue Manager / KBC Securities N.V. – Bulgaria Branch
Number of shares prior to the offering / The capital of Industrial Holding Bulgaria PLC amounts to BGN 43,756,118, distributed in 43,756,118 ordinary, dematerialized, freely transferable and registered voting shares with par value of BGN 1.00.
Number of shares after to the offering / 58,341,490, provided that all offered shares are subscribed.
Minimum number of subscribed shares / 7,292,686 subscribed shares is the minimum number for the subscription to be considered successful.
Issue Price / BGN 1.40
Amount of the Issue / BGN 20,419,520.80
Use of the capital raised / The Management of IHB PLC Plans to use the funds raised with the new issue to fund the operations of the companies in the Group, including but not limited to:(1) the construction of ship Anteya, with construction No 459 and ship with construction No 102; (2) the investment projects in Dockyard Port –Bourgas AD, Elprom ZEM AD, other subsidiaries, including new projects, as well as in order to improve the ratio attracted funds/equity in the Group.
Similar information about the use of the revenues is presented in Article 3.4 of the Securities document.
Dividend / The holders of shares shall have the right to receive dividends.For realization of their right the General Assembly of the shareholders will have to make a decision following the procedure outlined in the Statutes of the Issuer.
Similar information may be found in Article 20.4 Policy regarding dividends of the Registration Document.
Start of the Offering / The start of the offering shall be considered the later of the dates of promulgation of the notice for the offering in the State Gazette and its publication in Dnevnik Newspaper.
The start date from which commences the term for transfer of the rights is the first working day following the end of 7 calendar days after the start of the Offering.
The end date for the transfer of the rights is 15 days after the start date for the transfer of the rights.
The start date for subscription of shares coincides with the date from which the transfer of the rights commences.
The end date for the subscription of shares is 15 days after the start date for the transfer of the rights and subscription of shares.
Rights under the shares / Right to dividend – a property right of the shareholder to receive a part of the net profit of the Company, proportionate to its participation in the capital of the Company, provided that the prerequisites laid out in law exist – audited financial statements approved by the General Assembly of the Shareholders and an explicit decision of the General Assembly for distribution of the profit.The right to receive dividends belongs to persons recorded as shareholders in the registers with the Central Depositary on the 14th day after the date of the General Assembly at which the annual financial statements have been approved and a resolution on profit distribution has been adopted.
Right to a liquidation quotaa property right of the shareholder manifested in the right of the same to receive a share of the residual property proportionate to its participation in the capital of the Company upon termination of the Company through liquidation.The exercise of the right to a liquidation share implies that the Company has been terminated.
Voting right – the voting right is a non-property right of the shareholders through which they participate in the management of the Company by taking part in the decision-making process on issues within the competence of the General Assembly of the Shareholders of the Company.Each shares of the present issue gives the right to 1 vote in the General Assembly of the Shareholders.
Risk Factors / The risk factors are described in Article 4 of the Registration Document and Article 2 of the Securities Document.
Rights / The present shareholders of the Issuer have the right to acquire shares from the offered issue in proportion to their share in the capital of the Issuer.In order to guarantee the priority of the present shareholders, securities – “rights” – shall be issued to their benefit.
The shareholders who wish to exercise their rights may submit an application for subscription of shares by the end of the term determined for the transfer of the rights.
Shareholders who do not wish to avail of their right to subscribe shares from the offered issue may sell the rights issued to their benefit by the end of the term determined for the transfer of the rights.
The rights are traded at the regulated market of Bulgarian Stock Exchange Sofia AD.Each shareholder may transfer its right by submitting an order for sale to the investment intermediary under whose account with Central Depositary AD the rights are registered.
Each person who has bought shares within the term for the transfer of the rights may exercise these rights by submitting an order for subscription of shares by the end of the term determined for the transfer of the rights.
Rights not exercised within the term for the transfer of the rights shall be offered for sale in an open auction organized by Bulgarian Stock Exchange – Sofia.
Each person who has bought shares at the auction may exercise these rights by submitting an order for subscription of shares by the end of the term determined for the subscription of shares.
Article 5.1.2 of the Securities Document provides a detailed description of the procedure for exercise of the issued rights.
Subscription Ratio / Under the present Offering one ordinary share may be subscribed against the exercise of 3 (three) rights.
Subscription of shares / The application for subscription of shares from the offered issue shall be submitted to KBC Securities, N.V. – Bulgaria Branch, directly or through the investment intermediary under whose account in Central Depository the rights issued to the benefit of the applicant or acquired by him are registered.
The procedure for submission of application for subscription of shares from the offered issue and the necessary documents are described in detail in Article 5 of the Securities Document.
Period for subscription of the shares / The start date from which commences the term for subscription of the shares from the present issue is the first working day following the end of 7 calendar days after the start of the Offering.
The end date for the subscription of shares by the holder of shares is 15 days after the start date for the subscription of the shares.
closing date for payment of the shares: / The deposit of the issue value of the subscribed shares shall be made by the end of the last day of the subscription under a fund raising account with a bank announced in the notice for the public offering under Article92a, paragraph1 of the Law on the Public Offering of Securities
Admission for trading / In case that the subscription closes successfully and the new issue of shares in entered into the Trade Register, the Issue shall request admission of the issue of ordinary shares for trading at the regulated market organized by Bulgarian Stock Exchange – Sofia AD.
Legislation / The offered issue shall be issued in compliance with the existing Bulgarian legislation.
Taxation / A detailed description of the Taxation is presented in Article 4.11 of the Securities Document.
Restrictions of the Offering / The Issuer shall not request admission for trading of the shares of the present issue at a regulated market different than the regulated market organized by Bulgarian Stock Exchange - Sofia AD.
The present Prospectus is intended for and the terms of the Offering are valid for all categories of investors.
The present shareholders of Industrial Holding Bulgaria PLC shall have priority for subscription of the shares of the offered issue. The same shall have the right to subscribe shares corresponding to the share of the capital of the Issuer held by them.
1. RESPONSIBLE PERSONS
The present document regards the initial public offering of shares issued by public company Industrial Holding Bulgaria PLC (the “Issuer”, "Company").The investment intermediary authorized to service the public offering is KBC Securities N.V. – Bulgaria Branch.
The Securities Document was prepared by Vesselin Zahariev – Director of Corporate Finance Directorate of KBC Securities, N.V. – Bulgaria Branch, Atanas Chobanov – Associate at the Corporate Finance Directorate of KBC Securities, N.V. – Bulgaria Branch and Lidiya Shumkova – Head of the Legal Department of KBC Securities, N.V. – Bulgaria Branch, together with Bogomila Hristova – Investor Relations Director at IHB, Nelly Kercheva – Financial Analyses and Investment Director at IHB, Gergana Atanassova – Financial Analyses and Investments Expert at IHB.
The indicated employees of the Investment Intermediary and the Issuer declare that they have made all reasonable efforts to ensure that the information contained in the Securities Document is not incomplete, misleading or untruthful.
The Issuer of the offered securities is Industrial Holding Bulgaria AD with seat and management address42 Dayan Gruev Str., Krasno SeloSofia. The Company has a two-tier management structure and its business is managed by a Management Board in composition:
Bozhidar Vassilev Danev;
Boyko Nikolov Noev;
Borislav Emilov Gavrilov;
Daneta Angelova Zheleva;
George Yanchev Momchilov.
The members of the Management Board of the Issuer shall be jointly liable for damages caused due to untrue, misleading or incomplete data in the whole Securities.
The financial statements of the Issuer for 2006, 2007 and 2008 and as of 30.09.2008 and 30.09.2009 have been prepared by the Chief Accountant Toshka Zlateva Vassileva.The person under the previous sentence is jointly responsible together with the members of the Management Board of the Issuer in the capacity of a person under Article 34, paragraph2 of the Accounting Act for damages caused due to untrue, misleading or incomplete data in the financial statements of the Issuer prepared by him.
The person who has audited the financial statements of the Issuer for the last three financial years – Dobrina Dimitrova Kaloyanova, an auditor registered under No293, in the capacity of an auditor for KPMG Bulgaria, with seat and management address:37 Frityoff Nansen Str.,Sofia,is jointly responsible together with the members of the Management Board of the Issuer for damages caused by the financial statements audited by her.
Declarations by the persons responsible for the information contained in this document are enclosed with this document and represent an integral part hereof.
2. key information
2.1. Summarized financial information
The following Tables № 1 presents summarized consolidated financial information about the Issuer, for the last 3 (three) years and the interim periods 1 January 2009 – 31 December 2009 and 1 January 2009 – 30 September 2009, including comparative data about the particular preceding periods.
Table №1Summarized financial information about the Issuer for the period 2006 – 30 September 2009 on consolidated basis
Source: Audited Consolidated Financial Statements of the Issuer for the period 2006 – 2008 and Unaudited Consolidated Interim Financial Statements of the Issuer as at 30 September 2008 and 30 September 2009.
2.2. Capitalization and leverage
The balance capitalization and leverage of the Issuer on a consolidated basis, respectively for the period 2006-2008 and as of 30.09.2009 and 31.12.2009, is shown in the following Tables №2, №3, and №4.
Table №2Balance capitalization of the Issuer for the period 2006 - 30.09.2009, consolidated
Source:Consolidated audited financial statements of the Issuer for the period 2006 – 2008, consolidated non-audited financial statements of the Issuer as of 30.09.2008 and 30.09.2009
Table №3Leverage of the Issuer for the period 2006 - 30.09.2009, consolidated
Source:Consolidated audited financial statements of the Issuer for the period 2006 – 2008, consolidated non-audited financial statements of the Issuer as of 30.09.2008 and 30.09.2009.
Table №4Consolidated capital structure of the Issuer for the period 2006 – 30 September 2009
Source: Audited Consolidated Financial Statements of the Issuer for the period 2006 – 2008 and Unaudited Consolidated Interim Financial Statements of the Issuer as at 30 September 2008 and 30 September 2009
For more information about loans, finding and provided guarantees, seeNotes 16 (Property, plant and equipment), 27 (Loans and borrowings), 25 (Share capital and reserves), 28 (Trade and other long-term payables) and 36 (Contingent liabilities) to the consolidated financial statements of IHB for 2008, as well as to the relevant notes to the financial statements of the Issuer for 2007 and 2006 and the interim financial statements as of 30.09.2008 and 30.09.2009.
The management of the Issuer declares that the amount of the working capital is sufficient for the present needs and it does not need to obtain additional working capital.
3. Use of proceeds
The expected total net proceedings from the current capital increase, provided that the total number of offered shared are subscribed to, amounts to BGN 20,373,709.
In case all shares are subscribed and the expected maximum funds are fully raised, the management of IHB PLC plans to use the funds raised with the new issue to fund the operations of the companies in the Group, including but not limited to:the construction of ship Anteya, with construction No 459 and ship with construction No 102; the investment projects in Dockyard Port – Bourgas AD, Elprom ZEM AD, other subsidiaries, including new projects, as well as in order to improve the ratio attracted funds/equity in the Group.
The planned distribution of expected net proceedings by projects and priority, are as follows:
Projects / BGN ‘000 / DescriptionShip Anteya (number 459) / 4,000 / Portion of the ship’s value.
Ship number 102 / 10,000 / Portion of the ship’s value.
DockyardPort – Bourgas AD / 2,000 / To finance the project of dockyard port expansion
Elprom ZEM AD / 800 / To finance the project for installing technological product line for manufacturing ofpolar coils from copperrims
Other / up to 3,574 / To finance projects of other companies in the Group, incl. new projects.
Total: / 20,374
A description of the projects may be found in the Registration Document Article 5.2.2 Description of the Key Investments of the Issuer in the Process of Realization and 5.2.3. Commitments for Major Future Investments of the Issuer.