At a general meeting held yesterday shareholders in Zaharni Zavodi AD Gorna Oriahovitsa (

) approved a proposal for capital increase using own funds, from 694,552 leva (355,118 euros) to 8,334,624 leva (4.261 mln euros) via the issuance of 7,640,072 paperless, registered shares with a face value of 1 lev. Each shareholder shall receive 11 new shares for free.

Shareholders also approved certain amendments to the statute, which allow the company's Management Board to adopt decisions for capital increase to a nominal amount of up to 15 mln leva (7.669 mln euros).

The Management Board was also authorized to issue bonds worth up to 20 mln leva (10.225 mln euros), or the equivalent in another currency.

The Management Boad will also be able to adopt decisions for capital increase and for issuance of bonds, effective for a term of 5 years after the registration of these amendments with the Commercial Register.

The GM also authorized the Management Borad to sign a contract with Zahar EAD for the rent of property for a term of 10 years, at 94,628.80 leva.

The management will also sign a contract with Zahar EAD for financial cooperation. The companies will provide financial aid to each other according to their financial situation. The maximum amount of a temporary financial aid is 5 mln leva (2.556 mln euros).

The company providing the financial support has to do so in a term of 15 days after the endorsement of the agreement.

The party that receives the cash agrees to liabilities equal to the amount of the average interest rate of the bank loads taken by both companies. The contract is in force through 2009.

Zaharni Zavodi AD Gorna Oriahovitsa will sell machines and equipment currently installed at its TEC Boylerna Stancia to Zahar EAD , as well as new machines and equipment on the reconstruction of K-3, for a total of 2 408 477.10 leva (1.231 mln euros).

The final date for transacting the shares of the company as a result of which the holder will be entitled to new shares from the capital increase is 26 September 2007.

Zahar Invest controls 43% of the company's capital, while GU Faradey and Rhythm 4 CB have 25.58 % and 25.55% respectively.

43 shares have changed hands so far today on the BSE at an average of 174.94 leva.