Armătura Shares Resume Trading Today

Trading in Armătura shares will resume starting today, according to an announcement published yesterday on the Bucharest Stock Exchange (BVB) website.

The resumption of trading comes after the shareholders' meeting decision from two weeks ago - which revoked the June resolution regarding the dissolution and initiation of liquidation procedures - was published in the Official Gazette.

In the second half of June this year, Herz Armaturen, which owns 86% of Armătura Cluj, decided on the company's dissolution, initiation of liquidation procedures, suspension, and delisting of its securities, based on incorrect information. According to documents published on the BVB website, the dissolution and liquidation of the company were motivated by the decrease of net assets to below half of the subscribed share capital, as well as the impossibility of carrying out its business activities, in line with commercial company law.

In the report prepared by Noa Tax Advisors, it was stated that the issuer's net assets (equity) had fallen in 2024 to 6.9 million lei - below 50% of the subscribed and paid-in share capital of 18.1 million lei. However, the issuer's 2024 annual report indicated share capital of four million lei, meaning the legal condition regarding the net assets falling below half of the share capital was not met.

The company's management claims that the 18.1 million lei figure was the result of a material translation error between the Romanian and English versions of the report prepared by Noa Tax Advisors, an error that was not flagged before the shareholders' general meeting decisions were adopted. The error went unnoticed for a long time, and on July 21, BVB suspended Armătura shares from trading.

The issue is that, from the announcement of the shareholders' meeting in June until the suspension of trading, Armătura shares depreciated by 43%, generating losses for minority shareholders. Moreover, the Armătura case raises questions about a possible case of capital market manipulation, perhaps unintentional, given that the decisions made were based on incorrect information. Ziarul Bursa flagged the case to the Financial Supervisory Authority (ASF), and the market supervisor told us it is monitoring Armătura's situation and, depending on the findings of its analyses, will take the necessary measures.

For the first six months of the year, Armătura reported revenues of 0.71 million lei, down 24% compared to January-June of last year, while for operating activities, the company reported a loss of 0.21 million lei, smaller than the 0.92 million lei loss recorded in the first six months of last year. Armătura's stock market valuation amounts to five million lei.