He remains a member of the board and Dimitris Sophocleous, former chief financial officer of A&D Pharma, became the new chairman.
This is one of the biggest changes in the management of a listed company, considering Popp has been running Impact since its incorporation in 1994 and his name is almost synonymous with Impact.
Popp was one of the first local entrepreneurs to float his company on the bourse, in 1996. He used the stock market to raise cash and drove Impact to over EUR250 million in 2007. He has been selling significant stakes in Impact to foreign investment funds thus reducing his own interest. He now owns only 16.5% in the company but remains its largest shareholder.
The investment funds, among which the Swedish-held East Capital, which owns 10% in Impact, US-based Artio (8.5%) and Franklin Templeton (6%) paid millions of euros in 2007 and 2008 to buy into the developer, one of the few real estate companies listed. The managers of these funds hoped they could profit from the boom on the local market.
The crisis upset their plans. Impact’s business has been dwindling over the last three years and losses piled up. It was on the verge of insolvency in 2010, after Romconstruct, one of its contractors, which built a residential complex for it, filed suit. Impact’s losses stood at 22 million lei (EUR5.03 million), while revenue fell to RON13.5 million from over RON150 million in 2008.
Impact’s capitalization is down to EUR8 million. Its assets are valued at over RON400 million and debts amount to RON105 million, according to the 2011 financial statement.
As the investment funds were not happy to have lost money, Impact’s board of directors suggested including on the agenda of the general meeting of shareholders on April 25 two special items to respond to what the significant shareholders wanted, Impact officials said.
Dan Ioan Popp could not be reached on Thursday for comment.
The new chairman of Impact, Dimitris Sophocleous had previously worked as CFO of pharmaceutical company A&D Pharma and of Romtelecom and started his own financial consultancy business in 2010. The number of the members of the board was raised from three to five, so that it now also includes Radu Bugica, US investment fund SygmaBleyzer’s manager for Romania, Stefan Gheorghiu Milicin, former commercial manager for Romania, Georgia and Bulgaria of real estate developer Willbrook International and Valeriu Ionescu, one of the oldest Impact shareholders, who has been working with Popp for a long time.
The new Impact chairman will get a monthly salary of RON10,000, and the other board members will get RON5,000 in net amount. Popp had been paid RON33,500 in gross amount in his former position.
The company plans to take loans from banks this year, and is also considering a capital increase or an issue of convertible bonds up to RON45 million to finance ongoing projects. (EUR1=RON4.3757)
(English version by Loredana Fratila-Cristescu)