Phoenix pulls through difficult period

Hamburg-based supplier Phoenix AG says it is well on its way to full recovery.

Although a nil dividend was declared for 2002, a restructuring program has been implemented and the company hopes to return to profitability in 2003.

The new principal stockholder Claas Daun seems to have increased his shareholding to nearly a quarter just in time.

"The restructuring of the business is nearly complete, exchange rates are low and we expect a positive annual result," said CEO Konrad Ellegast when presenting the financial statements.

Though a few restructuring measures are still necessary, Daun apparently has no plans to sell off parts of the company. After Daun's purchased shares in Phoenix, the media speculated that he might make an offer to shareholders who control 60 percent of the freely-trade stock and then sell parts of the supplier.

Ellegast admitted that the company is suited for such a scenario since Phoenix has already split its sectors into GmbHs (limited liability companies) controlled by a holding company in Harburg.

Also, the stock capitalization of approximately 120 million euros is well below the equity capital of 170 million euros. The CEO said, however, that "Mr. Daun is an entrepreneur" and is not a raider but more of a white knight who can defend the company against a hostile takeover.

In March the textile entrepreneur from Lower Saxony bought a 13% stake in Phoenix from the Deutsche Bank, increasing his total holding to 25%. Nearly 15% of stocks are still on offer at WestLB on a long-term basis. It is not clear yet who will buy them.

"I am considering a long-term investment in Phoenix," Daun told Automobilwoche. He said that when buying such shares it wouldn't be an "in today and out tomorrow" business.

"I did not get involved in order to destroy Phoenix," Daun said.

He refused to confirm whether he was considering buying more stock: "The cards are being shuffled anew every day."

Phoenix seems to be on its way up again. In 2002 the supplier of noise insulation and hose systems had a turnover of 1.13 million euros and made an annual loss of 7.4 million euros after tax. But its plan is to return to profit in 2003.

"I assume that our operating profit will increase significantly," Ellegast said.

Tags: Suppliers

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