Stirol Plans 2.9x Par Value Increase.

The company announced that it plans to increase the par value of its shares 2.9x, from UAH 12 (USD 2.4) to UAH 35 (USD 6.9). The share capital will be proportionally up, from USD 64.5 mln to USD 188 mln. The decision still needs to be approved at the company’s AGM scheduled for June 10. The planned par value increase is motivated by the need to match share capital with the company’s fixed assets, which were revalued several years ago. Concorde Capital: Par value revision should not have any impact on book value and fair value of the company’s stock. However, by increasing par value, shareholders can minimalize  taxes should they sell the stock at premium to par. Does this news indicate that the shareholders are considering selling out? Not necessarily, but we’ll keep an eye on the situation.

Stirol’s Book Value:

Before And After Par Value Revision, USD mln

                               Old*                New

Share Capital             64                 188

Reserves and Other  180                 56

Retained Earnings    121                 121

Total                       365                 365

* as of 1Q 2006