Ukrproduct plans to increase authorized shares by 20% to 60.0 mln

Ukrproduct Group Limited (AIM: UKR LN) plans to increase its authorized share capital by 20% to GBP 6.0 mln, implying the new number of authorized shares will reach 60.0 mln, should the company’s shareholders approve the decision at the AGM scheduled for June 24, 2010. As the management says in the AGM notice dispatched yesterday, the company has no present intention to issue new shares. Conditional upon the approval of authorized share capital increase, the company plans to purchase up to 9.0 mln of ordinary shares, representing 15% of the total authorized shares after the share capital increase. Ruslan Patlavskyy: Based on our analysis of the AGM notice, we do not rule out that the said actions of Ukrproduct might testify to its intention to attract a strategic investor. According to our calculations, upon the implementation of this plan, the new investor might be offered up to 16.8 mln of shares or 28% stake (6.0 mln from the potential share issue in the future, 9.0 mln shares bought from the open market, and 1.8 mln treasury shares). This might serve as a positive short-term driver for Ukrproduct’s shares should the market find more support to this hypothesis.