Advance Equity Fund To Raise 26 Mln Leva, Tripples Capital

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Advance Equity Fund is planning to increase capital by nearly 26 mln leva (13.293 mln euros), which is twice the current amount of capital. The decision was adopted at a meeting of the Board of Directors held 2 July, and approved by the Financial Supervision Commission on Wednesday.

„We will use the money to finance our new investment projects, as well as to ensure the completion of the ongoing investment programs of our subsidiaries,“ says CEO Vencislav Petkov.

„We are currently planning two new projects in the sphere of telecommunications, and we are expecting to complete at least one of them before the end of the year. We are also receiving new projects all time and we are willing to support the best business ideas presented by motivated entreprenuers,“ Petrov also added.

Advance Equity is the first Bulgarian company for equity financing. It was established at the beginning of 2006 with a capital of 2 mln leva (1.022 mln euros). Last year the company filed an IPO and increased capital by 10 mln leva (5.112 mln euros). The company is similar to the popular type of private equity companies in the US and Western Europe which take more risks and finance newly established companies with a lot of potential.

Advance Equity has acquired stakes in six private companies in Bulgaria, and has invested in them 90% of the funds it raised last year. These are Energy Invest, operating in the filed of renewable energy sources, Energy Effect, which operates in the filed of energy efficinecy, the agricultural Ahro Tera Sever, Enesi – a supplier of compressed natural gas, Project Estate – a developer of industrial and business properties, and SEP Bulgaria, which is developing an operator system for electronic payment via mobile phones.

„Nearly half of the funds we expect to raise will be used to provide additional financing to our subsidiaries. Project Estate is developing its first project – a large shopping center, SEP Bulgaria needs a large amount of starting capital, and we are hoping it will start operation at the beginning of next year,“ Mr. Petrov added.

At the end of June the Board of Directors of the Bulgarian National Bank approved a license of operation to SEP Bulgaria as a system operator of a system for electronic payment via mobile phones. The license will be issued after a 6-month period in which the company has to fulfil certain technical requirements.

The capital increase procedures will begin on the second week of September when trade with the rights starts on the BSE. Investors will be able to subscribe two new shares to each 1 share they hold. Currently the company's capital is allocated in 11,984 shares. The company will issue 23 968 568 new shares with a face value of 1 lev and issue value 1.08 leva. Capital increase will be successful if at least 18 000 000 new shares are subscribed and paid. Underwriter of the emission is IP Karoll.

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