Construction company Arcom sees four-fold decline

Arcom, one of the leading construction companies before 1990 has seen its turnover plummet, to less than 10 million euros, a four-fold decline against last year.
The company was taken over last year by businessman George Becali, owner of Steaua football club, and Arcom has not won any major contracts on the constructions market, with the number of employees down over six-fold, to 77.
“The company will only build projects for George Becali, and we will make a fresh start in 2010. This year we cleaned up and cut the number of employees to a minimum, we couldn’t cut any further if we wanted to have a base for growth,” one of the members of Arcom’s Board of Directors, who wished to remain anonymous, told ZF.
The company has not earned any new contracts this year on the Romanian market and lived off contracts sealed in previous years. “We were late in making the decision to reduce the number of employees, because we kept hoping to win a big contract. We took part in tenders this year, but, having failed to earn any contract by August, we started making massive cuts to the number of employees and kept only the management and the engineers,” says the quoted source.
The Arcom management intends to sell its 10% stake in plasterboard producer Lafarge Arcom Gips, as well as other shares in companies where Arcom is a minority shareholder. According to market information, Arcom was offered 1.7 million euros by Lafarge for 10% in Lafarge Arcom Gips, equivalent to 56 euros/share. Lafarge representatives did not wish to comment on the transaction.
“We commissioned an audit in order to see how much Lafarge Arcom Gips shares are worth because we received an offer that we consider to be too small. Lafarge has a pre-emptive right to buy the stake, but we are also considering negotiating with other producers or investment funds, if an agreement is not reached,” says the Arcom representative.
Lafarge has up until now invested over 20 million euros in the plasterboard plant held by Lafarge Arcom Gips in Bucharest, which enabled it to increase its stake to 90% because Arcom did not take part in the investment.