Electricity group Luxten, one of the most profitable Romanian companies, may see its shareholding structure undergo significant changes in the next two months, following a complex transaction that could be worth more than $50 million, according to market sources.
Zoltan Boszormenyi, president and founder of Luxten, has recently decided to sell his 38% stake in the group. Boszormenyi may be joined in his initiative by the two investment funds that together hold 36% in the group’s capital: AIG New Europe Fund and Société Générale Romania Fund (SGRF), the quoted sources say.
The transaction will be complex and its value will depend on the decision of the two funds.
After the deal is signed, the current managers of the company will become, directly or indirectly, Luxten’s main stockholders. Funding for the transaction may be secured by US bank Citibank, according to the above-mentioned sources.
Even if the financing scheme does turn out to be rather complex, the managers will get a loan to buy the shares.
Zoltan Boszormenyi and officials of the two funds were not available for comment.
AIG New Europe Fund bought into Luxten in 1999, whereas SGRF invested in 1997 and, since their investments had matured, they started looking for an exit this year.
The two funds bought into Luxten to provide the company with financial support during its growth period and then sell it to a strategic investor, together with the other shareholders.
Luxten last year posted $100m turnover and gross profit revolving around $30 million.
On the international market of energy and electric power, there are few companies able to “digest” such an acquisition. However, most of these companies (General Electric, ABB, Schulmberger, Siemens) are facing difficulties: ABB is selling part of its operations to cut losses, while Siemens and Schulmberger have already sold their metering divisions.
ABB had voiced interest in Luxten in 2001, but negotiations fell through.
Luxten is among Romania’s most complex companies, as it owns five divisions: metering (AEM Timisoara), lighting devices (former Electrofar Bucharest), public lighting, IT and electric power supply.
The group was established in 1993 by Zoltan Boszormenyi, a Canadian investor that bought bulb factory Electrofar Bucharest from the Romanian State. Luxten hit it big on the Romanian market when it started the public lighting business in 1997, with financial help from Société Générale Romania Fund.