Mystery solved: Russians own almost 15% in Alro

Are the Russians coming or not? Will the share capital be increased threefold or not? Those were the main questions people were asking themselves at the beginning of a General Shareholders Assembly (AGA) of one of the best Romanian companies, Alro Slatina which were quickly answered: the Russians came through their lawyers and the capital increase was out of the question.

On the other hand, one of the significant shareholders, Romanian Investment Company, unhappy with the treatment it received from the main shareholder, threatened to sell its shares. Wanters were quick to appear, although there are $15 million at stake.

What was a mere rumour two months ago is a sure thing now. Russian investors hold nearly 15% in Alro through various funds and companies. Three representatives of the Russians at the AGA, two women and one man, Romanian lawyers, took their seats in the room early that day.

They were, however, more reserved than one should expect from someone who holds such a stake in Alro. They asked no question, just settled for taking notes. According to the latest reports, the stock sold early this year by Broadhurst, owner of 10% in Alro, was bought and split between three funds: Rafferty, Radiance and Globoid Finance Establishment.

Moreover, another shareholder came along at about the same time, that is Anvil Ventures Fund, which analysts say administers Russian money, as well.

Harlan Zimermann is the manager of the Romanian Investment Company (RIC) that holds 10% in Alro and kept a low profile for most of the meeting. He visibly approved the financial reports presented by the company’s general manager Gheorghe Dobra, which showed Alro had a very good year again.

He had only one problem with the investments, but the company administrators were quick to give him the necessary explanations.

Zimermann snapped, though, when the representative of the main shareholder (the Privatisation Authority), Marin Nicoli, presented the propositions for Alro’s Board of Directors membership.

Prior to selling its 10% in Alro, the Broadhurst investment fund’s Board representative was Andrei Siminel. Once the shares sold to the three investment funds, which most people deem as representatives of a Russian financial group in Alro, Andrei’s Board seat became vacant.

Logically thinking, Zimermann assumed a minority shareholder will be replaced by a peer in the Board of Directors and sent his proposition to the main shareholder, the Privatisation Authority (APAPS) before the AGA: Vivien Ashton, well known on the Romanian market.

Only that the logical thing to do in London, where Zimermann co-ordinates RIC, is not the logical thing to do in Bucharest, as Marin Nicolici, APAPS Olt director and former Electroputere union leader, nominated another APAPS administrator to replace Siminel.