Koper, 13 November (STA) - The supervisory board of logistics group Intereuropa backed on Tuesday the management plans to sell its Moscow-based subsidiary, an investment that nearly ruined the company with huge cost overruns.
This is "a major step towards the financial restructuring of the company," chief supervisor Bruno Korelič told the press. The overhaul will be completed with a planned capital increase and debt restructuring due by the end of the year.
Details of the sale have not been disclosed, but unofficial reports suggest that the company is in talks with Unicredit bank to sell the stake in Intereuropa East and the Checkovskiy logistics centre.
Korelič would not confirm the reports by business daily Finance that the company will get EUR 50m from the sale, EUR 94m less than it spent on the investment.
Even after the investment is sold, Intereuropa will still have "just over a hundred million euros" in debt, according to Korelič.
The move is the final chapter in what turned out to be a huge gamble for the company, which built the logistics centre Checkovskiy for its proximity to Russian car makers.
The investment budget was set at less than EUR 45m, but ended up costing three times as much. What is more, it never generated as much revenue as initially planned.
The company has sued former CEO Andrej Lovšin for EUR 37.5m in damages over the deal, but the litigation is still ongoing.
Intereuropa was hit hard by the economic and financial crisis and posted losses between 2008 and 2011, its balance sheet additionally weighed down by loans for its Russia venture.
It has been forced to restructure, which included selling several foreign subsidiaries as well as the entire trucking division.
In the first nine months of this year it posted EUR 142m in sales, 2% below plans, with operating profit at EUR 14m and net profit at EUR 7.2m.
Korelič labelled the results as "encouraging".