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PannErgy conducts capital raise in Polifin

Alternative-energy company PannErgy has conducted a HUF 1.675 billion (€6.23 million) capital raise in its 100%-owned geothermal unit PannErgy Polifin, PannErgy announced on the website of the Budapest Stock Exchange on Tuesday.

The measure will increase Polifin's registered capital to HUF 1.7 billion from HUF 25 million.

PannErgy announced on November 9, 2009 that ONP Holdings, a company owned by Cashline chairman Ottó Albrecht, would also contribute to the capital increase in Polifin under a syndicate agreement. The two companies also signed an option agreement granting ONP an American option to buy 1 million PannErgy shares between November 10, 2009 and October 30, 2010 at a price of HUF 950 per share.

PannErgy said that the two companies would increase Polifin's capital in several phases, eventually raising ONP's stake to 15% after the company is converted into a private company limited by shares.

Under the agreement, the PannErgy and ONP hold preemption and joint-sale rights as well as a minimum-price sales obligation and rights-to-purchase for the other company's stake, with the latter valid between January 31, 2011 and January 31, 2016. The minimum purchase-price for Pannergy's stake is HUF 16.73 billion as of January 31, 2011, and will rise by 15% annually. The price will be 15-times of EBITDA minus net loans if this value exceeds the above computed minimum price.

PannErgy chairman Balázs Bokorovics announced on November 10, 2009 that the company would implement the capital raise in Polifin to finance the unit's drilling of geothermal wells. (MTI-ECONEWS)