March 21, 2006 The Board of Directors of:
1. NAOUSSA SPINNING MILLS S.A.
2. FANCO S.A.
3. RODOPI SPINNING MILLS S.A. and
4. GALLOP S.A.
announce their decision regarding the merger through absorption of the remaining Companies by NAOUSSA SPINNING MILLS S.A. according to the provisions of Law 2166/93 in combination with the relevant provisions of Law 2190/20.
As already announced, on 03.17.2006, Naoussa Spinning Mills S.A. Group of companies and the creditor Banks National (NBG), Emporiki, Agricultural, Alpha Bank and EFG Eurobank reached an agreement for the financing of the Group's business restructuring plan and the refinancing of the Group's total bank debt. This agreement aims at achieving the Group’s overall restructuring and recovery. The business restructuring plan, as prepared by the external advisor (Kantor) in cooperation with the group's management, includes actions for the overall restructuring of the corporate, organizational and financial structure of the Group, aiming at capitalizing on the leading position that the Group holds in the international market, at reducing the production, administration and selling cost as well as the financial cost. The restructuring of Naoussa Spinning Mills S.A. Group of companies under the management of Managing Director Mr. Halarabos G. Vatistas assumes the merger via absorption in 2006.
It should be noted that:
Fanco S.A., as subsidiary of Naoussa Spinning Mills is included in its consolidated financial statements.
Rodopi Spinning Mills S.A. is also a subsidiary of Naoussa Spinning Mills, while 21.48% of its shares are held by Fanco. The two companies possess in total 98.63% of Rodopi Spinning Mills’ shares. The Company in question operates in the Industrial Area of Komotini three (3) of the internationally state-of-the-art Pennie cotton spinning mills.
Finally, GALLOP S.A. is a 90% Fanco subsidiary and engages in the production, import, export and trade of any kind of knitted underware and garments.
Therefore the Board of Directors of Naoussa Spinning Mills S.A. decided to propose to the General Assembly the merger through absorption of FANCO S.A, RODOPI SPINNING MILLS S.A. and GALLOP S.A. with Balance Sheet transformation date of the absorbed on 3/31/2006. The Board of Directors of the absorbed Companies decided accordingly.
The Companies' Board of Directors authorized the Management to proceed with:
1. the preparation of a draft merger agreement,
2. the preparation of a Report that justifies the merger and more specifically the shares’ exchange relationship,
3. the appointment of a Certified Auditor to audit the transformation Balance Sheets and will compose the Valuation Report for the Companies and
4. the appointment of the Underwriter by the BoD of the absorbed.
Moreover, the Board of Directors of Naoussa Spinning Mills S.A. decided, in parallel to the merger, to proceed with a share capital increase through rights issue or through the issue of a convertible Bond Loan.
Finally, according to the approval procedures according to laws, as well as according to miscaleneous procedures required, the merger is expected to be completed during 9months after the Balance Sheet transformation date.
