The four companies that make up the Continental hotel chain will complete their merger in February and the newly formed entity, Continental SA, will be listed on the Stock Exchange by the end of March, Radu Enache, chairman and majority shareholder of the companies said.
"The floatation prospectus will be done by the end of February and the company will go public in March. We are now consulting with brokerage companies to decide what type of listing to pick, either a simple floatation or a primary or a secondary IPO," Radu Enache said.
The four companies that own Continental hotels in Romania are Continental, Continental Vest, Continental Nord and Dacia Continental. One of the four, Continental Vest is listed on RASDAQ.
"This will be a merger by absorption, with Continental absorbing the other three," said Radu Enache, the man who controls the business.
The Continental hotel chain is comprised of 12 hotels and employs more than 1,000 people. The hotels generated 18.7 million euro total turnover last year, up from the about 16 million euros in the previous year. The chain will expand by two new hotels this year, one of which will open in Bucharest, in the Izvor area and the other one in Constanta.
"We expect 22-23 million euro turnover for the new company created by the merger in 2005. The net margin for this business is 10-15%," Enache explained. This means a net profit of about 3 million euros a year. Enache added the post-floatation scenarios included a capital increase for Continental SA.
The main reason why the company decided to go public was to raise additional cash in order to sustain a number of extensive hotel projects over the next few years. The investment projects the company will begin in the next two years amount to over 20 million euros. They consist in building hotels