What the hell has happened Reka Industrialin in the government?
Investors have been waiting for information about the company’s future direction for almost two years, and the deal is only getting thicker.
In the spring of 2023, the industrial investment company Reka Industrial completed the cable company Reka Cable of the sale and recorded a capital gain of 31 million euros. A strategy process was started to find new business, but the process has not progressed. The company is still sitting on a pile of cash that doesn’t seem to have an efficient use.
Reka distributed part of the sales profits as giant dividends in the spring of 2024, and the strategy work continued.
In May, the company announced a set of criteria to support the strategy work, and said it had hired a consulting company to help Sisu Partners. The intention was to aim at increasing shareholder value through corporate restructuring and to “implement a strategic path that will allow the company to grow its turnover in the next five years into a medium-sized listed company”.
Still the company’s CEO in October 2024 Tulander Cider comment For securitiesthat the strategy work is in full swing. Now, however, the process seems to have hit a wall and there will hardly be any news about the future direction in the near future.
The latest, published on Wednesday, January 8 the bulletin saysthat due to differences of opinion of the company’s board, no potential arrangement has been carried through to completion.
Reka’s board member and principal owner Markku Rento commented in the company’s announcement that there were few options according to the criteria drawn up in spring 2024, which has been a concern throughout the process. Therefore, it is necessary to reform both the criteria and the board.
Rentto did not want to reveal the board’s decision in more detail to Arvopaper. Other members of the board, i.e. the chairman Leena Saarinen, Päivi Marttila this Eva Raita did not want to comment. Tulander also did not open the matter beyond the press release.
Reka invited the shareholders to an extraordinary general meeting to elect a new board of directors. The general meeting will be held on January 30, and the shareholders’ proposals on the number of members and the persons to be elected will be published no later than January 22.
Reka Industrial’s largest owner is Markku Rentto, who owns Reka Oyabout 65 percent of the company and 0.46 percent through personal ownership. The rest of the ownership is more dispersed.
So at least Rentto will continue on the board, but will the other members be removed, and if so, who will take their place? Clearly, this government has not reached a consensus, so changes are necessary.
Another question is how long a listed company can continue strategy work in general. At some point, the question will also come up, whether it would be better to just distribute the money to the current shareholders and put the straws in the bag, when there is no clarity about the future.
Is it justified to spend years just thinking, during which the value of the investors’ holdings diminishes? Reka’s share price has already fallen by 22.6 percent during the year.
Story edited on January 9, 2025 at 3:25 p.m.: Corrected Leena Saarinen’s name correctly.
Source: www.arvopaperi.fi
