LUG S.A. announces the reverse stock split
03 September 2012
LUG S.A. announced its intention to consolidate its shares. The resolution on reverse stock split of the Issuer shall be put to the vote at the Extraordinary General Meeting convened as of 28 September.
The Management Board of LUG S.A. convened the Extraordinary General Meeting of the Company as of 31 August 2012, on which the Shareholders will vote on the idea of consolidation of shares of LUG. The proposals set out in the draft resolution specify the parity of consolidation at the level of 25:1.
This means that each Shareholder of the Company will receive 1 share with a nominal value of PLN 0.25 (twenty five grosz) per every 25 shares with a nominal value of PLN 0.01 (one grosz). The whole procedure will not affect the share capital of LUG S.A., which will remain at the current level, i.e. PLN 1,799,642.50.
"When in 2010 we split shares in a ratio of 1:4, we had a purpose to build the capitalization by increasing the market liquidity of securities of LUG. We wanted to satisfy the need reported by investors to be able to freely enter and leave the shareholder structure without causing a negative effect on the rate" says Ryszard Wtorkowski, Chairman of the Management Board of LUG S.A.
The higher capitalization is essential for LUG S.A. to be able to transfer its shares on the regulated market of the Warsaw Stock Exchange. The minimum level is EUR 12 mln, and the capitalization of LUG stands at about PLN 25 mln. At the same time, the Company, although considered to be one of the most exciting players in the NewConnect, is listed with a few dozen discount to the broad WIG index, taking into account the price/earnings ratio. Prospects for the development of LUG were recognized by such lists as TOP PICK NewConnect, prepared by analysts of Infinity8. LUG was appreciated by highly dynamic performance, innovative lighting products offered and plans for the construction of a modern plant producing LED components.
"Unfortunately, the decision to split shares did not meet the expectations, particularly, in the scope of the turnover value of shares of the Company over more than the past two years. We started to be perceived as the company with shares valued in grosz, which was harmful for our reputation and ultimately discouraged new institutional investors from engaging their capital" explains the Chairman of LUG.
Unitl now, LUG S.A. has issued a total of 179,964,250 shares, of which more than 23 percent is hold by the Shareholders with participation in the shareholder structure of less than 5 percent.
"The Investors attending our meetings highlight that the Company is undervaluated. The technical process of consolidation is not enough, but I hope that, together with subsequent periodic results, successes of the company in Brazil and development plans, it will be a positive stimulus to improve our market valuation" explains Wtorkowski.
The Extraordinary General Meeting will be held on 28 September this year in the registered office in Zielona Góra, at 12:00. The dividend day is also scheduled on the same date. The dividend will be paid on 11 October this year for the first time in the trading history of the Company. The amount of the dividend is 1 grosz per share at the dividend rate of 7.14 percent.