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On Telecoms-Zenon Deal Faces New Delay



Shareholders representing only 9.15% of Zenons share capital were present at the companys first repeat shareholders meeting. As a result, the necessary quorum was not reached and the discussion on Zenons merger with On Telecoms was postponed. The deal, according to which On Telecoms will be listed on ASE, will thus face further delays, as this was the second time that the quorum was not reached.


These late developments cause worries over an eventual cancellation of the deal. On Telecoms executives rejected these rumours, saying that the completion of the necessary procedures is just a matter of time.

The main reason for the difficulties to reach the quorum lie in the fact that 80.07% of Zenons shares are afloat. The remaining shares are controlled by Proton Bank (7.98%), Mr Th. Economopoulos (6.53%) and Mr K. Spyropoulos (5.42%).

According to law, at the second repeat meeting the quorum is set at 2/3 of the share capital . An eventual third shareholders meeting will have to reach a quorunm of 1/5 of the companys share capital.

Market players say that the delay works against the two companies plans. Zenons short-term obligations are on the rise, reaching 10.7 million euro in the end of June, 11.7% higher than in December 2007. In the first half of 2008, turnover on a unified basis reached 2 million euro and losses amounted to 1.4 million euro.

In the first half of 2008, On Telecoms turnover reached 19.30 million euro. In the fiscal year 5/5/2006 – 31/12/2007) turnover reached 10,06 million euro and losses amounted to 22 million euro. By the end of 2007, the companys obligations amounted to 59 million euro and own capitals stood at 19.3 million euro.

According to the plans, Zenon will sell its core activity of robotics and be used as an umbrella that will absorb On Telecoms activities through a capital stock hike. If the necessary procedures ae completed, On Telecoms will be listed on ASE. BDO estimates its valuation between 124.9 and 152.6 million euro based on the companys 2008-2013 business plan.

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