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EOP Biodiesel AG: Banks extend credit lines
Operating business shows positive development / 2010 production almost entirely sold / Former members of Management Board and Supervisory Board members liable for damages
The positive business development of EOP Biodiesel AG of late also contributed to the successful conclusion of talks on financing. According to the preliminary figures for EOP Biodiesel AG's financial statements in the first half year 2009/10 (reporting date 31 December 2009), earnings before interest, taxes, depreciation and amortisation (EBITDA) of €0.7 million were generated with sales of €42.7 million (previous year's period: €57.0 million). Excluding the expenses that accrued for restructuring, EBITDA would have even been €1 million higher. In comparison, a considerable loss of €-3.0 million was posted in the previous year. The gross profit margin rose from 5% in the previous year to now 15%.
Both the oil mill, with an annual capacity of 42,000 tonnes, and biodiesel plant III, with a capacity of 100,000 tonnes, are currently operating at full capacity. Biodiesel plant II has a biodiesel capacity of 30,000 tonnes, twothirds of which is expected to be utilised in the course of the year. The company now has more than 120,000 tonnes posted in the order books for the calendar year 2010 due to a third major customer that it has acquired in the petroleum industry.
The report on the first half of the financial year 2009/10 is scheduled for publication on 31 March 2010.
Enforcement of compensation for damages from former members of the Management Board
Former Management Board members Prof. Dr. Karl-Wilhelm Giersberg and Sven Schön are expected to be called upon to pay compensation for damages, if necessary with legal action. The Supervisory Board is formally responsible in this regard.
This is largely based on incidents involving the former subsidiary ABID Biotreibstoffe AG in Austria (ABID) and the shareholding in AS Baltic Holding Company in Latvia (BHC). In connection with the shareholding in ABID, the current estimate shows overall damages of €3.5 million. The claim from the investment in BHC should amount to €2.4 million.
According to the available findings of the current investigation, loans at ABID were allegedly not issued properly and stipulations requiring approval were not observed. A capital increase in 2008 was submitted without sufficient assessment according to the expert reviews available. Prof. Dr. Giersberg and Sven Schön were in charge for all of these procedures. Moreover, the legal reviews available provide concrete evidence that ABID shares were sold by the two former Management Board members as well as by members of the Supervisory Board to EOP Biodiesel AG long after ABID had found itself in crisis.
The shareholding in BHC was purchased without normal due diligence according to the reviews available. Important documents such as investment appraisals are believed to have been inaccurate, or possibly even manipulated. Furthermore, an unsecured loan was granted to BHC which had to be fully amortised. According to the legal reviews available thus far, Prof. Dr. Giersberg did not observe the stipulations requiring approval and did not involve his fellow members of the Management Board.
There has been no evidence of any active misconduct on the part of the sitting Management Board member Bengt Korupp. Mr. Korupp has only been a member of the Management Board since 1 January 2008, meaning that he was not yet in office at the time of the major incidents in which damages were caused. Moreover, none of the incidents in question fall under his area of operation.
Investigation of the Supervisory Board
Given the knowledge at hand, the Management Board has also initiated an investigation of the Supervisory Board. The company now assumes that claims for damages can also be made against members of the Supervisory Board and will take the necessary steps.
Postponement of the Annual General Meeting on 10 March 2010
On 28 January 2010, the Annual General Meeting was scheduled for 10 March 2010. Upon the scheduling of the Annual General Meeting, there had already been indications of evidence showing breaches of duty by former members of the Management Board and that the Management Board had initiated a review to examine whether the Supervisory Board's administration had been carried out properly. However, the findings were neither conclusive nor as extensive as today's knowledge. As such, one of the proposals was to decide in the Annual General Meeting on 10 March 2010 to postpone the decision on the exoneration of Mr. Sven Schön and Prof. Dr. Karl-Wilhelm Giersberg as well as the members of the Supervisory Board.
"Against the backdrop of the findings newly obtained and consolidated since the Annual General Meeting was called on 28 January 2010, the Management Board was no longer able to sustain its proposed resolution to the Annual General Meeting, namely to postpone the exoneration of the former members of the Management Board Sven Schön and Prof. Dr. Karl-Wilhelm Giersberg and of the Supervisory Board. At this time, we would instead propose not exonerating the former members of the Management Board", stated CEO Jörg Jacob. "The same goes for the Supervisory Board. We will therefore submit new proposed resolutions at the rescheduled Annual General Meeting and thereby give shareholders the chance to make their decision based on the new information. Given the registration formalities, this would no longer have been possible if the Annual General Meeting were to take place on 10 March 2010. However, even in this difficult situation, it is in the best interest of the company to actively involve the shareholders, and as many of them as possible, in the company's destiny in order to ensure that future decisions by the administration are legitimate. This is above all important because share packages are influenced by the very people against whom claims are to be enforced."
Against this backdrop, an agreement was made last Monday to postpone the Annual General Meeting planned for today to a date still yet to be determined. This will likely be in May 2010.
This announcement is neither an offer to buy nor an invitation to make an offer to purchase or subscribe to securities. No public offer of shares in EOP Biodiesel AG was made in connection with the open market launch of EOP shares on the Frankfurt Stock Exchange. This communication does not constitute a share prospectus. It and the information that it contains are not intended for direct or indirect circulation to or within the United States of America, Canada, Australia or Japan.
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