M&A alert. Reconstruction Capital II to increase its stake in Policolor to 55.36 pct

The Reconstruction Capital II Ltd (RC2) investment fund, in its first communication to its shareholders in 2018, has announced that they have signed a conditional agreement to acquire a higher percentage of shares in the Policolor company.

RC2 aims to increase its direct or indirect stake in Policolor, from 40 percent to 55.36 percent, by acquiring shares in investment funds focused on Romania and whose main asset is the Romanian producer of varnishes and paints, forming 60 percent of the company together.

RC2 wants to acquire 22 percent of the shares of Reconstruction Capital (RC) and 10 percent of the Romanian Investment Fund (RIF), a transaction estimated at EUR 3.3 million. By buying these shares, RC2 wants to become the majority shareholder of Policolor, so that it can be a decision maker in the implementation of the company’s development strategies, and, in a potential exit process, RC2’s previous investments to be taken into consideration.

The document sent to shareholders also asks for their approval for the new direction of investment, only in Romanian assets, oriented towards the real estate sector in Romania.

Once the proposals are approved, RC2 will therefore be active in the varnishes and paints sector through its majority stake in Policolor SA, in the hotel sector through its majority stake in Zenith Hotel in Mamaia resort, in the financial services through their investment in IFN Telecredit, and will develop investments in the real estate sector in the future.

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Ion Florescu, majority stakeholder in RC2, stated: “The investment team at RC2 has a proven record of performance and know-how and a very good experience in developing and growing businesses in Romania. We continue to believe that the local market still has a lot of potential through performance and growth at a regional and European level. We believe in investments made in this market, which is where our wish to convince shareholders to invest exclusively in Romania comes from”.