May 31, 2006 In the framework of releasing the company’s First Quarter 2006 Financial Statements, of the new Regulation article 293 of the Athens Exchange, as well as the related provisions of the underlying legislation, we inform the investing public of the following:
According to the Athens Exchange regulation, the ATHEX BoD in its meeting on 3.3.2006, taking into consideration:
1. the company’s negative pre tax income for 3 consecutive fiscal years (2002-2004)
2. the negative pre tax income in the latest fiscal year (2004) greater in absolute number than those of the corresponding previous year period and greater in absolute number than the 20% of the company’s turnover value,
decided to enroll the company's share under Supervision Regime since Friday March 4, 2005, in application of Article 110 / Element A of the Athens Exchange Regulation.
It is noted that in view of the current conditions the company is in need of further capital strengthening, as the accumulated losses have resulted in the Company’s net equity reported at below 10% of its paid-in share capital, situation which if it remains as such by fiscal year-end, then the company wiil fall under article 48 of Codified Law 2190/20. For this reason the Ordinary General Meeting on 5/19/06 took knowledge and approved of the management’s actions to proceed into merger through absorption of the company by Naoussa Spinning Mills, so as to encounter the negative net equity situation of the first quarter. The transformation Balance Sheet is set as the Balance Sheet of the absorbed companies on 3/31/2006. It should be noted that the restructuring and reorganization plan, as approved and recently financed by the main credit banks, provides for the merger through absorption by NAOUSSA SPINNING MILLS of the other companies of the Group’s textile division (FANCO S.A., NAOUSSA SPINNING MILLS S.A., and GALLOP S.A.). The companies’ General Meetings to convene for this issue will decide on the merger.
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, the Group of companies of the parent Naoussa Spinning Mills S.A. and the credit Banks National, Emporiki, Agricultural, Alpha Bank and EFG Eurobank, reached an agreement regarding the financing of the Group’s restructuring plan as well as refinancing of the Group’s total bank debt. The financing of the Group’s restructuring plan is gradually executed according to progress recorded.
The management of the company estimates that the realization of the above, already in progress since early April, will bear fruits in the second half of the current fiscal year.
We remain at your disposal for any further clarification.
