Petrokemija Reveals Restructuring Details to Investors

Petrokemija has announced a presentation to investors via the Zagreb Stock Exchange, in which they clarified the details of the restructuring and recapitalization of this company.

According to them, a deep analysis by the consulting firm AT Kearney determined at the end of last year the framework possibilities for implementing restructuring, with the key element being the opening and actual liberalization of the gas market in Croatia.
Areas of change include the organizational unit (OU) and the sales process (P) aimed at increasing market shares and improving sales margins in regional markets, OU procurement aimed at reducing material costs, operational processes aimed at increasing the efficiency of plant and labor utilization, and measures that will enable faster results.
The goal of the restructuring is to ensure long-term sustainable, financially profitable operations for Petrokemija, and the implementation of measures, they say, can begin immediately upon acceptance of the proposal, specifically from May 1, 2013, to December 31, 2015.

The projection for the future development of Petrokemija is based on strategic market positioning in the broader region, optimizing long-term supply of key raw materials, especially natural gas, modernizing facilities to increase energy and technological efficiency while meeting environmental standards, improving the management model based on further informatization of technological processes and supporting processes, and rationalizing and adapting human resources.

The key to all changes, they state in the presentation, lies in the profitable demand in the market, particularly domestic and regional, which could increase by 30 to 50 percent in the next five-year period, and in an optimistic scenario, even double.
Among significant ongoing investments, they listed the reconstruction of the UREA plant worth 40 million kuna, reduction of N2O emissions in waste gases, the Nitric Acid 1 plant valued at 16.2 million kuna, reduction of NO2 and N2O emissions in waste gases, the Nitric Acid 2 plant with an investment value of 4 million kuna, investments in equipment of lesser individual value, and logistics investments of 15 million kuna.

Additionally, modernization of the Ammonia plant worth 520 million kuna is planned, reduction of ammonia and dust emissions from the prilling tower, the Urea plant valued at 42 million kuna (alternative granulation of Urea – 200 million kuna), environmental investments worth 200 million kuna, and a cogeneration plant for the production of electricity and thermal energy, an investment worth 1.5 billion kuna.
Regarding the increase in share capital, the final amount will depend on the success of the issuance, specifically on the number of shares that will be subscribed and paid. The Management Board states that the issuance of shares will be considered successful if at least 50 percent of the total issuance amount, or at least 551,285 shares, is subscribed and paid within the established deadlines.

If the subscription of newly issued shares is unsuccessful, Petrokemija will return the paid funds to investors within seven days after the expiration of the last deadline for subscription and payment of shares.