It was announces last Friday, after the closing of the stock market, that PannErgy sold all of its shares in Synergon. The timing of the transaction is odd considering that signs of a change can be seen, and more favourable news were reported by the company in the recent months.

Although to the full picture belongs that the chairman of PannErgy noted that the company wants to focus solely on geothermal energy, and if the market conditions are favourable, they are disposing their interests in other areas. It is also worth noting that geothermal projects have extremely high costs, thus the money is probably needed for the ongoing project in Miskolc, which is continuously being delayed.

PannErgy sold its stake in Synergon

After the closing of the Budapest Stock Exchange, an announcement was issued about PannErgy, and its fully-owned subsidiary, PMM Ltd. got rid of its 12.52% share as part of an OTC transaction. The sale of the shares took place at an average price of 400 per piece, thus around 466 million HUF was received by PannErgy.

As a result of the transaction NAVIGATOR Investments Ltd. now holds about 11.71% share, while the free float is 75.77%.

The fact that a buyer could be found for the shares may had a role in the quick execution of the transaction, since it is difficult to sell this big amount on the market considering the low liquidity of shares. The identity of the buyer is not known yet as Synergon didn’t provide information on it, but because it is required to reveal acquisition of ownership above 5%, an announcement is expected to be published very soon. It may be important to note here that a financial investor couldn’t do much solely with the shares of PannErgy.

PannErgy was a financial investor

PannErgy and Cashline both acquired shares in the company in 2006 as financial investors, which was followed by a massive upheaval as the investors were hoping that the company can be made profitable. Yet the euphoria didn’t last long, from around 1900 HUF price level the shares experienced a massive decline.

This was followed by a massive downturn, and a reverse tendency could only be seen in the past few quarters, which is primarily due to the organizational restructuring under the lead of the new CEO, Zoltán Jutasi. As part of this the company’s size was decreased to adjust it to the demand conditions and the fixed costs were cut back. The effects of these measures were already visible in the past few reports.

Cashline, which acquired 25% ownership in 2006, started to get rid of its shares earlier, based on the statements issued in January, the company now has less than 5% ownership. Recently, PannErgy also made a decision and sold its shares in one block.

Based on the announcement the company sold its shares in Synergon at 400 HUF average price per share. The average purchase price for 2006 can be easily calculated, which turns out to be 878 HUF per share. Based on this it can be said that with certainty that PannErgy sold the shares at a loss.