The company's current capital stands at 2 mln leva (1.022 mln euros) allocated in the same number of shares. Main shareholder is Nikolay Mihaylov controlling 97% of the capital, and the rest is held by physical persons, long-term managers in the holding. The emission's underwriter is IP Solomoni Financial Brokerage.
Shares will be offered on the unofficial market at a fixed price and investors will only be able to submit orders for the amount they will buy. Shares may be subject to secondary trade after the auction.
The company will use 14 mln leva (7.158 mln euros) of the total 22 mln leva (11.248 mln euros) to purchase machines and equipment in order to enhance its production capacity, which, on the other hand, is expected to boost revenues.
This decision is due to several factors. Mainly, the increasing amount of money invested in the road infrastructure of the country, which is expected to grow several times. The company will not be able to implement all necessary projects with the current capacities.
According to the holding, the existing equipment is too old and its substitution with new, more reliable technologies that meet all modern requirements of environmenatal sustainability is urgent.
The new machines and equipment will be installed in the regions of operation of the holding's subsidiaries – Stara Zagora, Burgas, Yambol, Pleven, Smolyan, Kazanlak, Plovdiv, and Sofia. The equipment may be rellocated depending on the amount of investments and work in the different areas.
3.6 mln leva will be invested in the development of the holding's technological park, which includes construction of buildings and facilities such as workshops, infrastructure around the asphalt and concrete centers, laboratories for testing of asphalt mixtures, concerete and others, in order to boost activity in certain regions. Such investment will be made in Burgas, Pleven and Plovdid.
Trace Group Hold expects its 2007 net profit/revenues ratio to come to 6.5%, as the company is completing a comparatively smaller project at present – the Trakiya Highway project. However, in 2008 this proportion is forecast to increase to 12.5%. According to the prospectus, the company expects 2008 profit to exceed by 2.5 times the projected profit for 2007, which is estimated at about 8 mln leva (4.090 mln euros).
Revenues are also expected to increase each year and to reach 300 mln leva (153.387 mln euros) by 2011, compared with 117 mln leva (59.821 mln euros) in 2006.
Trace Group Hold operates in the sphere of projects for rehabilitation, reconstruction, and construction of roads, motorways, airfields; building of underground stations; water and gas supplying systems; high civil engineering, strengthening of land slides and slippages, as well as emergency reconstruction activities. The holding operates in compliance with all requirements of the FIDIC and all internatinal standards.
Currently the holding controls majority stakes in 12 branch interrelated companies, situated in regions of strategic importance for the industry.