Grupa Azoty, which is facing financial problems, will obtain more money. At the extraordinary meeting, it was decided to increase the company's share capital. The stock market shows optimism, another day.
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An extraordinary general meeting of Grupa Azoty shareholders was held on Friday. The decision on a new share issue was made by a majority of votes. The bill on this matter was submitted by the State Treasury on Wednesday.
The state-owned Grupa Azoty Group will increase the company's share capital through the issue of series E shares with the entire exclusion of pre-emptive rights. The new shares are directed to the State Treasury.
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In this way, Grupa Azoty can obtain more money for its operations. The new issue covers almost 34 million series E shares with a nominal value of PLN 5 each.
Grupa Azoty will repair its finances
What does the above announcement from a state-owned company that has been struggling with financial problems for a long time mean in practice? Grupa Azoty needs money, so it will create new shares and sell them.
There will be several consequences of doing so. First of all, the company increases the pool of shares, which leads to capital dilution. It's like dividing the cake not into 8, but into 12 pieces. The cake is the same, but each old piece becomes relatively smaller.
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The exclusion of pre-emptive rights is key information for current shareholders. It means that the existing owners of shares do not have priority in purchasing these new securities. The company wants to send them directly to a specific entity (in this case, the State Treasury).
In this way, Grupa Azoty can obtain up to approximately PLN 168.6 million (at nominal value).
Grupa Azoty will issue shares. How does the stock market react?
On Friday, after the company's announcement, the mood among holders of Grupa Azoty shares remained good. Quotations on the Warsaw Stock Exchange were positive – about 3%. above Thursday's level.
Thus, the Azoty Group's good run on the stock exchange continues. Since March 4, when the share price dropped below PLN 16, the market valuation has increased by a total of 14%. An hour before the end of the WSE session, one share could be purchased for approximately PLN 18.
