March 31, 2006 According to the regulation of the Athens Exchange, the BoD of the ATHEX in its session on 3.3.2005 taking into consideration:
1. the negative pre tax results of the Company for 3 successive fiscal years (2002-2004),
2.the negative pre tax results for the fiscal year (2004) larger in absolute figure than the corresponding results of the previous fiscal year and than 20% of the company's turnover,
decided to enlist the company's stock "under supervision" since Friday March 4, 2005, in application of Article 110 / Element A of the existing regulation of the Athens Exchange.
Since June 2005, the Company, along with the other textile companies of the Group, has jointly submitted for approval and financing the five year business plan, which will give the company the ability to deal with the liquidity problems for the realization of the required restructuring actions.
Hence, 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. 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 of the Fanco S.A., Rodopi Spinning Mills S.A. and Gallop S.A. by Naoussa Spinning Mills S.A., which furthermore will reinforce its own capital through the issue of a convertible bond loan or/and a share capital increase via rights issue. The above actions were approved by decision of the companies' Board of Directors on 03.17.2006 and of the parent company Klonatex Group of Companies S.A. The merger of the Group's companies, as well as the other capital enhancing actions is under approval by the companies' General Meetings. The financing of the Group's restructuring plan will be realized gradually according to progress. The company's management estimates that the realization of the above actions, the application of which will gradually start in early April, will bring results mainly in the 2nd semester of the current fiscal year.
