Photons can bring profits

A visionary Canadian entrepreneur and two foreign investment funds created and developed Luxten, a public lighting business, with bulbs, gas and electricity counters, currently estimated to stand at more than 100 million dollars.

The company’s financial shareholders say that some important companies in the field are interested in purchasing Luxten Romania shares, but no discussion has been finalised yet. However, a part of Luxten shares are likely to be put up for sale very soon, allowing shareholders to derive significant gains.

“There is some interest in Luxten, but no purchase offer has been extended yet. However, I think that our investment in Luxten will yield profits beyond our expectations,” Doina Popescu, Investment Officer with AIG-CET Capital Management, which administers AIG New Europe investment fund, told Ziarul Financiar.

This investment fund holds a 22% stake in Luxten, which it acquired for 15 million dollars. The fund invests in business likely to yield annual dollar-denominated profits of more than 35%.

“Luxten is an almost perfect story: an entrepreneur with extraordinary business orientation took over the management of two companies, Electrofar Constanta and AEM Timisoara.

He managed to restructure and add them value. Luxten has gone so far that now it can export technology. It is an example of growth that contradicts the evolution of Romanian economy,” Cella Eftimescu, managing director with Societe Generale Asset Management, told Ziarul Financiar.

Societe Generale Asset Management administers Societe Generale Romania fund, a foreign investment fund holding 14% in Luxten.

The company’s Q1 net profit stood at 125 billion lei, up 63% against the year-ago period, while Q1 turnover was 500 billion lei, up 76% against the first quarter of 2000. Luxten expects 90 million dollars in turnover and several million dollars in profit this year.

“All the company’s business lines posted growth over the first quarter, but it is worth mentioning that export was one of the most important engines. A new business line has emerged (the electric power supply), as Luxten is one of the pioneers on the power supply free market.

This business still holds a low share of the total, but it is important that we should be ready for the market’s further liberalisation,” Mihai Nour, Luxten financial manager, told Ziarul Financiar.