On the AGM called for 19 April the management proposed voting on the 1:10 share split and two new share issues. The new issues will include 15m series I shares with rights for current shareholders and 5m new shares series J excluding rights for current shareholders. In total, after the split and both issues the share capital of Bytom will consist of 50m shares and the new shares will constitute 40% in the increased capital. At current market price the implied value of new issues exceeds PLN 40m. Nothing regarding the use of the proceeds was given.
Our view: The new share issues are unexpected. In our opinion, the proceeds could be used to finance acquisition of Warmia, which could take place in midyear. The company also is under threat to pay PLN 7.4 claim to Inwestycje II. The case is currently in court.