December 20 (SeeNews) - Romania’s TeraPlast [BSE:TRP], the parent company of local construction materials producer TeraPlast Group, said it has acquired a majority stake in Moldovan pipe manufacturer Palplast for 1.8 million euro ($1.97 million).
The transaction strengthens TeraPlast Group’s presence on the Moldovan market and will also serve as a gateway to Ukraine, the company said in a press release filed with the Bucharest Stock Exchange on Tuesday.
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As part of the deal, TeraPlast will inject 1 million euro into the equity of Palplast and pay 800,000 euro to the existing shareholder. Thus, the shareholding structure will be comprised of TeraPlast with a 51% stake and Fribourg Capital, the current shareholder, holding 49%.
"The expansion of the geographic footprint and growth through mergers and acquisitions are strategic objectives of TeraPlast Group. Acquiring a factory in Moldova represents another step to the implementation of this strategy. The market holds immense potential, and the country’s status as a candidate for accession to the European Union opens the doors of pre-accession funds," said Dorel Goia, chairman of the Board of Directors at TeraPlast.
TeraPlast Group is a major polymer processor in Central and Eastern Europe. The group includes parent company TeraPlast, as well as subsidiaries TeraGlass, TeraPlast Recycling, TeraBio Pack and Somplast.
Blue-chip TeraPlast's shares traded 1.59% higher at 0.512 lei ($0.11/0.1 euro) as of 1144 CET on Wednesday on the main market of the Bucharest Stock Exchange.
($=0.912977 euro)