ECONOMY

In Brief

Folli Follie plans to merge with subsidiaries Listed jewelry retailer Folli Follie said it has decided to merge with its duty-free unit Hellenic Duty Free Shops (HDFS) and department store operator Elmec to improve efficiency. Folli Follie, which sells products ranging from luxury goods to apparel in Europe and Asia, said its board and the boards of HDFS and Elmec proposed the merger of the three firms to shareholders. HDFS, in which Folli Follie holds a 56.8 percent stake, will absorb Folli Follie and its 95.6 percent subsidiary Elmec, Folli Follie said in a statement late on Thursday. «This decision will contribute to the simplification of the group’s structure, improve efficiency… [and] strengthen the balance sheet,» said Folli Follie CEO Georgios Koutsolioutsos. Folli Follie’s shareholders will exchange one share for 1.5355 shares of the new entity that will be formed. HDFS shareholders will exchange one share for 0.4325 shares and Elmec’s shareholders one share for 0.0621 shares. The group operates a network of about 700 points of sale in over 30 countries around the world. It had profits of 26 million euros in the first quarter this year. (Reuters) IMF in consultations on Cyprus until July 5 NICOSIA (Reuters) – A team from the International Monetary Fund is in Cyprus as part of its regular review of the island’s economy, the Central Bank of Cyprus said yesterday. The International Monetary Fund team met with the Finance Ministry and the Central Bank, where the need to maintain fiscal discipline was discussed, the island’s Central Bank said. «The view was expressed that while Cyprus was not unaffected by the international crisis, its banking sector was robust mainly due to the supervision implemented by the Central Bank,» it said. Challenges however persist because of negative developments in the external environment, the Central Bank added. Cyprus has just emerged from its first recession in more than three decades, caused by a slump in real estate and tourism. The International Monetary Fund team wraps up its consultation on July 5. Romania measures Romania’s top court rejected parts of an austerity package related to pension cuts yesterday in a ruling that could endanger a bailout package led by the International Monetary Fund for the second-poorest European Union state. Disbursement of about 2 billion euros in aid from the IMF and the EU depended on the court’s approval of a government move to cut state wages by a quarter and reduce pensions by 15 percent. The full austerity measures – including the wage cuts, which the court did not object to – will now be sent back to parliament, which must bring them in line with the constitution, a process which could take months. «There were five challenges brought to the bills,» judge Acsinte Gaspar told Reuters by phone, confirming earlier reports by local news agency Agerpres. «We accepted two.» In a statement, the court said it concluded that two items in the austerity plan violated the constitution: the overall 15 percent cut in pensions and the recalculation of magistrates’ pensions. The statement did not elaborate but the court is to release the full reasoning for its ruling by Monday evening. The 20-billion-euro IMF-led aid package is vital for the recession-afflicted economy, and the Constitutional Court ruling hit currency and stocks in the large Balkan country which, along with neighbor Bulgaria, joined the EU in 2007. Investors are nervous about the debt and deficit position of emerging European economies like Romania, after Hungarian assets slumped in early June on comments from officials that it might suffer a crisis similar to Greece’s. (Reuters) Coke in Serbia Greek Coke bottler Coca-Cola Hellenic (CCH) said yesterday it offered 16.9 million euros to fully acquire its Serbian subsidiary. The Greek bottler, 23 percent-owned by the Coca-Cola Co, said it initiated a tender offer to purchase all the shares in Coca-Cola HBC Serbia it does not currently own. CCH now holds an 89 percent stake in the Serbian bottler. (Reuters)