Alro buys shareholder

Primary aluminium producer Alro Slatina will buy 99.9% in one of its main shareholders, Conef SA (Bucharest) in a deal that might come close to $10 million. Conef holds 6.4% out of the 77% in Alro controlled by Marco Group. Conef is held by Marco Acquisitions, Marco International Group’s investment arm.

On the other hand, trade company Marco through Marco Industries has an offer pending on the Stock Exchange, aimed at attracting 4.7% in Alro. The percentage accounts for the freely tradable shares on the market, approximately 2%, and for the stake held by another company of the group, Marco Acquisitions.

Making the shareholding structure within the American trade company simpler is making the life of Stock Exchange analysts harder, though. It is yet unclear whether following the takeover of Conef by Alro, the latter’s shares indirectly held through Conef would entitle it to vote or to get dividends. Another reason for the minority shareholders to be concerned are the consulting or raw material supplying contracts between Alro and the companies within the Marco Group. Alro at the end of last week announced, as bound by the law, new contracts for purchasing raw materials concluded with Marco International and worth $1.5 million.

One of these contracts has Alro buying 340 tonnes of magnesium for nearly $0.6 million, i.e. for $1,755/tonne. The release does not specify the delivery condition, which makes the magnesium price on the international market vary between $1,550 and $1,750/tonne.

Alro in the first few months of the year took over most of the stake held by the American trade company in Alprom Slatina and therefore undertook the obligations in the privatisation contract. A capital increase was conducted in order to cope with the above-mentioned obligations, but since not all the minority shareholders subscribed, Alro raised its stake from 70% to 85% in Alprom, so that it now controls more than 90% in the company, together with Marco. Now that this threshold has been crossed, Alro and Marco have the possibility to have Alprom delisted from RASDAQ where its shares are currently trading.

A stake of 9.8% in Alro changed hands on the Stock Exchange in April under a $17.4 million deal. Some brokers protested back then, saying the deal was against the regulations of the capital market. The deal was part of a more complex operation, enabling Marco Industries (Netherlands) to take over approximately 70% in Alro from Marco Acquisitions.

As for the offer now run on the Stock Exchange, Marco is willing to pay 16,130 ROL for every Alro share, with the total offer worth 267bn ROL ($8.2 million). When the offer was put out, Alro was trading for 15,000 ROL/share but quickly rose to 16,100 ROL, a high reached on Friday, due to the speculators collecting shares from the market only to sell them for a little more during the offer. Alro’s market capitalisation therefore went beyond $150 million last week, so that Conef’s stake is worth $9.6 million.

vlad.nicolaescu@zf.ro