QVT is the second-largest shareholder of Flamingo, one of the top electronic retailers on the local market.
The dissolution might seem profitable, given that the company’s assets, minus current debt, are evaluated at some €41 million, and the company’s capitalization amounts to €5.5 million.
However, Flamingo President, Dragos Simion, said that more than half of the company’s assets are not tangible (brand, goodwill), which cannot be capitalized. “Nobody would have anything to gain from capitalizing assets, if the company is dissolved. If this had been so, we would have listed them as collateral to keep obtaining financing from banks,” he said.
QVT management was not available for comment yesterday. However, sources close to the fund said: “If, for instance, one has invested €1 million in a company, and estimates are not very optimistic regarding its future, one has a choice. Namely between losing all the money or recovering say €100,000. What choice would one make?” Brokers commented that the decision is strictly business-based, as long as the fund estimates it has more to gain by dissolving the company.
