News

Bulgarian holding co Synergon bets on construction biz

Last week, the holding sold a 9% stake in Electrodes, the nation's only industrial producer of electrodes for manual arc welding, to a unit of ESAB, a major provider of welding and mechanised cutting equipment and consumables, for 6.8 mln euro.

The transaction marks Synergon's complete exit from the machine-engineering business as the company shifts focus to its construction industry subsidiaries.

Some of the revenue from the Electrodes sale will be set aside for Balkanceramic, a Synergon company for the manufacture of concrete roofing and pavement tiles. The company will also resume the production of bricks.

Another Synergon company, Toplivo, is undergoing an internal restructuring aimed at freeing up financial resources tied up in inventories and trimming the clientbase down to just key players in the construction sector.

Toplivo will also continue to invest in its fuel distribution operations despite the lower profitability so that the whole business could be sold off if an interested investor shows up, said Toplivo executive director Shtilian Stoyanov.

The company is currently building filling stations in Pomorie and Sevlievo. It already operates outlets in Pleven and Silistra.

Synergon will continue to inject cash in its furniture business as well. Just under 5 mln levs have been earmarked for investment in furniture company Premier PL by the end of 2007.

The holding company plans to list on the local bourse two of its subsidiaries, Synergon Hotels and Lakprom. It is not yet clear if the companies will float old or new shares but the more likely option is new shares so that they could tap for financing the local capital market, said Bedo Doganian, chairman of the Synergon supervisory board.

Synergon Hotels owns Novotel Plovdiv, part of international hotel group Accor, in the city of Plovdiv and the Evropa, Glarus and Iskar hotels in Black Sea resort Sunny Beach.

Lakprom manufactures paints and varnishes.(Dnevnik)