Ukraine’s Kernel raises $220m in Warsaw IPO
Nov. 21, 2007, 10:32 p.m. |
Ukraine’s leading sunflower oil producer on Nov. 13 set the final offer price for its initial public offering on the Warsaw Stock Exchange
fering on the Warsaw Stock Exchange at $9.66 per share, which is expected to raise a total of $220 million.
The listing is expected to begin Nov. 23. The 22.76 million shares being offered is about 36 percent of the holding’s total share capital, which is estimated at $613 million, according to Kyiv-based investment bank Alfa Capital Ukraine.
Of the shares up for sale, 16.7 million are newly created, which will raise “about $160 million from the stock issue for investments, the maximum revenue expected to implement our strategy,” said Andriy Verevskyy, Kernel’s 33-year-old owner and a lawmaker from the Yulia Tymoshenko Bloc.
The price-setting process was “successful and also positive for Kernel’s investment, as the amount of capital raised will allow the company to fully pursue its expansion strategy,” said Tetyana Orlova, an analyst with Alfa Capital Ukraine.
Kernel plans to use the added revenue to construct a new multi-seed-crushing plant with a crushing capacity of 510,000 tons in Mykolayiv Region, acquire port storage space, buy agricultural land and further increase production capacity, the company said.
Kernel’s IPO demonstrates investors’ growing interest both in his company and Ukraine’s agriculture market, Verevskyy said, who held 100 meetings in the last two weeks with Polish and European investors.
“Our offering was met with a great amount of interest,” Verevskyy said.
“On the one hand, investors value Kernel Group’s dynamic growth in recent years, its strong market position, and solid financial results. On the other hand, they also perceive great potential for the growth of our company.”
The global market for sunflower oil and grain trading is growing rapidly, Verevskyy said, and Ukraine is playing an increasingly important role on the international market.
Kernel, which controls about 35 percent of Ukraine’s sunflower market, will be the second Ukrainian company to list in Warsaw, after Astarta, a major domestic sugar producer. Astarta raised $32 million last year by floating an 18.8 percent stake.
Ukraine’s billionaires have been gearing up to list their big assets on major markets, with some of the biggest companies expected to list on the London Stock Exchange.
Kernel and Astarta, considered mid-sized Ukrainian businesses, are too small to list in London.
Analysts said they can tap into higher liquidity levels in Warsaw, where there is a lot of pension money available for investment in the stocks.