Local electric cable producer Romcab Targu Mures wants to attract up to EUR 27 million from the Bucharest Stock Exchange (BVB), through a capital increase in which new investors could also participate.

The company needs cash for development, but has reached the limit of bank debt, so now it’s trying to strengthen its balance sheet through a share issue.

The producer will sell new shares at a price 6 to 9 times higher than the current market price of RON 7.7 (EUR 1.7) per share. Existing shareholders will be able to buy new shares at RON 50 (EUR 11.3), in the first stage of the capital increase, and the unsubscribed shares will be sold to other investors for RON 70 (EUR 15.8) per share.

The offer could be the largest capital increase carried out on the local stock exchange this year, after the one operated by lender Banca Comercială Carpatica (BCC).

The ratio between total debt and equity exceeded 400% for Romcab after the first half of the year. The company’s turnover dropped by 5% in the first six months of the year, to EUR 74.9 million, and the net profit decreased by 53% to EUR 1.8 million.

editor@romania-insider.com