Case 1: Atlas Eléctrica
Atlas Eléctrica (Atlas) was founded in a small shack in 1961 and, by 1976, grew to be the first listed company to issue shares on Costa Rica’s stock exchange, the BolsaNacional de Valores (BNV). The founders of the company knew that this new listing opportunity would allow them to fund and help sustain Atlas’s growth potential. This still holds true today. Market capitalization of Atlas at the end of September 2005 was US$ 17.2 million down 11.8% from US$ 19.5 million as of 30 September 2004. Atlas Eléctrica S.A. is the holding company of a manufacturing enterprise basedin Costa Rica with sales subsidiaries in Central America and the Dominican Republic.Atlas currently produces household refrigerators and stoves under its own brandnames of Atlas and Cetron. The company also manufactures on behalf of other privatebrands, such as Sunbeam and Nedoca, and previously manufactured under thebrand names White Westinghouse, Kelvinator, Frigidaire and Blue Point.Atlas’s sales in Central America, Mexico, United States, Jamaica, Puerto Rico andother Caribbean islands will yield estimated combined total annual revenue for fiscalyear 2006 of US$ 100 million. Atlas is the main player in the Central Americanregion with over 50% market share, competing head to head with products from Asiaand the Americas. Recently, Atlas had several product models that were certifiedaccording to US and Canadian standards. This has opened up export market potentialfor Atlas, on which it hopes to capitalize in the next few years, especially in lightof recently concluded free trade agreements in the region. Export market expansionis part of the company’s strategic growth plan and already accounts for the bulk of thecompany’s 28.5% sales increase in 2005, compared to the previous year. The main attributes that have allowed the company to succeed have been: * Years nurturing a brand image based on quality and excellent post-consumer service; and * Creating value-products with tasteful designs accessible to the pocketbooks of the targeted clients. Atlas’s current ownership structure is presented in the table below.
Atlas has 1,432 employees as of August 2006.
Atlas’s share price was Costa Rican Colones 18.28 on 30 September 2004 but fellto Costa Rican Colones 17.50 as of 30 September 2005. The company’s shares areincluded in the BNV stock index.It should be noted that the original founders currently do not have control of thecompany. Also, there are no institutional investor shareholders, and the free float of shares is 3.9%. No one group holds control of the company. Control is establishedby the concurrence of several groups at the Annual General Meetings, and decisionsare made by the majority of votes present at the Meeting. Minority shareholders ofthe company are not provided with tag-along rights. However, local regulation doesestablish an obligation for a public offer, if a certain threshold percentage of shares aresought to be purchased. In such applicable cases, all shareholders will then haveaccess to a uniform offer price per share. Responsibilities of the Board and Management
Since the mid 1980s, the Board of Directors has seen the benefits of having independentdirectors, including their fresh ideas and new approaches to the company. Of thecurrent seven Board members, four are independent. The Chairman of the Board doesnot have any CEO responsibilities. His only means of influencing management arethrough the Compensation and the Audit committees and at the monthly Board meetingswhere financial results, budgets and strategy are analyzed and approved. Key seniormanagers are chosen based on professional and merit criteria.Remuneration of the Board members is approved by the Board itself with the aimto be within reasonable limits when compared to other companies’ compensationpractices. There is remuneration paid for attending each Board meeting, normallyheld once per month. The executive compensation is fixed taking into...
Please join StudyMode to read the full document