At Bittnet's General Shareholders' Meeting in October, the distribution of the funds obtained from the sale of subsidiaries will be discussed

The Board of Directors of Bittnet Systems (BNET) has added to the agenda of the shareholders' meeting on October 21 the request of the investment fund Agista, regarding the approval of distributing to shareholders the amounts obtained from the possible sale of subsidiaries, either as dividends or through share buybacks, according to the issuer's report published on the Bucharest Stock Exchange (BVB) website.

More specifically, Agista requests the distribution to Bittnet Systems shareholders, in the form of dividends and/or through share buyback programs, of any amounts received by the company as a result of transactions involving the shares/holdings in its subsidiaries, through which a strategic partner is brought in, to the extent permitted by legislation and the company's financial situation.

In justifying the request, the investment fund highlights that the time has come for shareholders to be rewarded for the support given during the period in which the company reinvested resources and did not allocate dividends, while the share price declined.

"Considering that the Bittnet Group is currently in a stage of identifying strategic partners for its major business lines (cloud & infrastructure, and business applications), we believe it is an opportune moment for shareholders to be rewarded for the support given in the past, during which the company constantly reinvested resources and did not distribute dividends, while the market value of the shares suffered a significant decline. Under these conditions, we propose that any amounts obtained from transactions regarding the attraction of strategic partners at the level of the company's subsidiaries be distributed to shareholders, through dividends and/or share buybacks, up to the maximum permitted by law, at the time those amounts are collected,” according to BVB reports.

In Agista's opinion, such a provision offers: protection of investors' interests and clarity in the use of the resulting funds; a balance between the company's development needs and the shareholders' right to benefit from their investment; a strong signal in the capital market regarding respect for investors and the commitment to increasing share value; and a first liquidity moment for shareholders, given that the market capitalization does not reflect the fundamental value.

In the past three years, Bittnet Systems' share price has depreciated by about 60%, according to BVB data.

Agista's request comes in the context of the shareholders' meeting agenda, which includes mandating Bittnet's CEO to identify strategic partners for group entities, both as creditors and as equity participants in Bittnet Systems' subsidiaries, namely attracting partners to enable the development of the subsidiaries independently of Bittnet's funding. "In fulfilling this mandate, the CEO is authorized to offer minority or majority stakes, acquired by investors either through purchase from Bittnet and/or through capital increases in the subsidiaries, with the percentages offered at the CEO's discretion, including total sale, within the limits of Article 90, paragraph (1), of Law no. 24/2017,” according to the agenda item introduced at the request of Mihai and Cristian Logofătu, founders of the integrated IT solutions provider.

According to the mentioned article of law, transactions exceeding 20% of a company's fixed assets require shareholder approval.

Other items on the October 21 meeting agenda include approving the launch of two bond issuance programs totaling about 200 million lei. One program targets the issuance of non-convertible corporate bonds, with a total value of up to 100 million lei, to be issued at a nominal value of 100 lei per unit, with a maturity between three and five years, and an annual fixed or variable interest rate of up to 12%. The bonds will be offered to investors through a private placement or public offering. The second program targets the launch of bonds worth a total of 20 million euros, at a nominal value of 100 euros per unit, with a maturity between three and five years, and a fixed or variable annual interest rate of up to 12%. The Board will be authorized to carry out all necessary operations for the bond issuance until December 2030, including listing the securities on the Bucharest Stock Exchange.

Currently, Bittnet Systems has four bond issuances listed on the Bucharest Stock Exchange.

Another item on the agenda, also introduced at the request of the Bittnet Systems founders, is reducing the number of Board members from five to three, as well as electing a new member, following the resignation requests of some administrators.

The candidates for the Bittnet Board elections are: Adinel Tudor - representative of Marketing Expert Consulting SRL; Cristian Logofătu; Anca Mănitiu; Andrei Cionca; and Aurel Podariu - proposed by Agista.

For the first half of the year, Bittnet Systems recorded a loss of 17 million lei, compared to a negative result of 4.5 million lei in the same period last year. The company's market capitalization stands at about 70 million lei.