The Slovakian Financial Fund Eco-Invest Became the Majority Owner of Slovenian Paloma
The Fund Eco-Invest injected 18.2 million euros into Paloma and made a bid for the whole company.
Sladki Vrh — The Slovakian Financial Fund Eco-Invest injected 18.2 million euros into Paloma and now owns 57.2% shares of the Company. The Fund also announced its intention to redeem all shares from other shareholders at the price of at least 4.01 euros per share. The Slovenian state holding also intends to accept this proposal and thus withdraw from the Company’s ownership.
If all other shareholders accept this takeover bid, the Slovaks will pay in total almost 32 million euros for the sale of Paloma. At the same time, the Slovenian State Holding (SSH) will receive 9.7 million euros.
The recapitalization will allow for investments into the production capacities, into the modernization of processes and the improvement of working conditions. As explained in the Company, this will make Paloma a more competitive player in the Southeast European markets.
Tadej Gosak Remains the Head of Paloma. A few days ago, the Supervisory Board appointed two new board members: Subhi Brož and Vladimír Kováč. The Company executives headed by Boštjan Gorjup, who previously submitted their resignations, will be replaced in January.
Centre of Competence
As a result of complex procedures and a delay, the Polish Abris Capital Fund refused the investments into Paloma. After that, the Czech Eco-Investment, which is part of the Slovakian Financial Fund Eco-Invest became the main owner of the Company’s shares.
After the recapitalization, the President of Eco-Investment Milan Fil’o stated that their task was to become a long-term strategic partner and build a strong international group of companies in the Central and Eastern Europe. The possibility of competing on equal ground with such multinational corporations as SCA and METSA tissue is on the first place.
Eco-Invest is a Slovakian industrial and financial holding with strategic investments in manufacturing companies, particularly in the pulp and paper industry (production of cardboard boxes, envelopes and packages). Other Holding investments include food production, telecommunications and real estate.
The total sales value of the Eco Invest Company portfolio amounts to more than 800 million euros and the total capital is above 1.15 billion euros. One of the most important Fund’s investments is the purchase of 49% shares of the leading regional pulp producer Mondi SCP, which is owned by the transnational Mondi Corporation.
Eco-Invest also owns 100% shares of the SHP Group — a manufacturer of toilet paper. It should be noted that the SHP is a Paloma’s competitor. Last year, the total production volume of all enterprises belonging to the Slovakian Fund reached 550 thousand tons of pulp and more than 720 thousand tons of paper.
For comparison, for the first nine months, Paloma has produced 51.3 thousand tons of paper.
In the end of July this year, the Slovaks signed an agreement with the Paloma’s trade union and works council. They committed for at least three years to maintain the provisions of the collective agreement, to maintain the current number of employees and the production capacity. The head of the Paloma’s trade union Pergam Nives Hrovat said that they had already sent a meeting invitation to the new owners. It is expected that the Companies would observe its liabilities.
Paloma completes successfully this year. The volume of production and the profit for the first nine months have increased. Operating profit before tax amounted to 1.9 million euros. The Company from the city of Sladki Vrh counts on more than 30,000 euros of added value per employee. This exceeds the previous year indicator and allows that the Company is in the middle of the pulp and paper industry ranking.