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Merkur Turns Operating Profit in 2012

Naklo, 06 March (STA) - Hardware and home equipment retailer Merkur ended 2012 with revenues of EUR 242m and an operating profit of EUR 1.3m, according to unaudited results released on Wednesday. The results are considerably better compared than in 2011, when the troubled retailer generated an operating loss of EUR 8m and EUR 226.8m in revenues.

Merkur, which is undergoing debt restructuring following insolvency due to a failed management buyout from 2007, is currently in the final phase of formalising December's recapitalisation, which was conducted through a debt-to-equity conversion involving creditor banks.

The first to publish the debt-to-equity conversion was bank Gorenjska banka, which was also the biggest contributor of new capital. Gorenjska banka received about 188,000 shares of the retailer and now holds over 9% of voting rights, Merkur said in a stock market filing today.

Other creditor banks are expected to follow in the coming days. In December, creditors subscribed about 735,000 new shares worth a total of EUR 39m in what was the results of several months of negotiations. The company's nominal share capital increased from some EUR 3.1m to EUR 3.8m.

Merkur, which ran up high debts following its highly-leveraged management buyout, entered court-mandated debt restructuring in August 2011.

Its management said that the recapitalisation would enable the restructuring plan to continue in 2013, as part of which the retailer plans to sell its wholesale arm Mersteel and consumer electronics division Big Bang.

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