Chervonoarmiyska Zakhidna Scheduled To Vote on Additional Share Issue

Chervonoarmiyska Zakhidna (SHCHZ: BUY) announced yesterday that the company’s shareholders scheduled an AGM for October 19. The AGM’s agenda includes a 2.2 times share capital increase at par value to USD 91.5 mln. The share capital increase will be held in two stages: during the first stage (February 20 to March 14) shareholders can subscribe for new shares on a pro-rata basis; the second stage will be from March 17 to March 21. The company intends to use the funds for capital expenditures. Eugene Cherviachenko: We believe the share issue will be approved at the AGM. The technically adjusted market price of the stock should be around USD 0.39 per share versus the current USD 0.74 per share. Our adjusted target is USD 0.39 per share (unadjusted USD 0.80 per share).