Greek-based Ellaktor has started the process of absorbing its wind farm subsidiary El.Tech Anemos in a merger by absorption
The proposed share exchange ratio of the merging companies is 1.27 new ordinary Ellaktor shares, with a nominal value of €1.03, for every one El.Tech Anemos existing ordinary share, which have a nominal value of €0.30.
Ellaktor said that on the basis of such a share exchange ratio, the pro-forma shareholding in the combined entity would mean that shareholders of Ellaktor would hold 82.606%, while shareholders of El.Tech Anemos would hold 17.394%. Existing Ellaktor shareholders will maintain the same number of shares in Ellaktor after the merger.
Completion of the merger is subject to obtaining approvals from the general meetings of shareholders of the merging entities, as well as any other necessary approvals, including by relevant authorities.
Ellaktor said the transaction was intended to be completed by 30 June, 2019. It added that the merging companies were expected to enjoy multiple benefits as a result of the merger.
In September, it said that a decline in turnover in its construction segment during the first half of 2018 had hit its first half figures, although it claimed that improved figures were recorded in its concessions, environment and wind parks divisions.
Now it has said that given Ellaktor’s leading role in the Greek infrastructure sector, the combined entity was set to benefit from Ellaktor’s long-term business outlook, broadening its growth prospects and providing minority shareholders with the opportunity to participate in any future share price appreciation. At the same time, the combined entity’s trading liquidity was expected to improve.
It also felt that the enhanced cash flow of Ellaktor post-merger would improve liquidity and enhance prospects for future capital returns.
It added that it further expected that the combined entity would have broader flexibility to allocate capital across segments and projects with attractive risk-adjusted returns, improved access to capital, and an expanded set of growth opportunities compared to the standalone prospects of each merging company.
The group’s financial performance is also expected to be enhanced as a result of synergies that will be created from financial costs, administrative costs and tax benefits having a positive impact on the group’s financial results.
Management will remain unchanged, which the company said meant that the combined entity would benefit from continuity of its leadership team. It added that this should minimise integration risk and disruption of the business’s continuity.