Positive View Of Richter Gedeon Ahead Of Sell-Off

A fully-subscribed turnout is being predicted by analysts for the latestsell-off in the Hungarian pharmaceutical industry, which involves the country's top drug producer Richter Gedeon. 2.8 million shares were to be issued between May 27 and 30, valued at 2.8 billion forint ($15.8 million). Of the total number of shares, 1.8 million are existing shares and one million are new shares. The stock was expected to be sold at a discount.

The Hungarian State Privatization and Holding Company (the AVRt) and the Hungarian Pension Office are expected to retain a 25% plus one vote stake in the firm until the end of 2000.

RG was able to increase its gross profit margins to 64.2% from 62% in the first quarter of 1997, helped by a strong US dollar and a change in its sales mix. The company said that the improvement was due to a significant proportion of sales being invoiced in US dollars, while incurring operating expenses in Hungarian forint, together with tight control of expenses and a management focus on achieving enhanced operating efficiency, according to New Europe.