Leading Romanian agribusiness group Agricover Holding announced on May 17 that it had canceled its planned listing on the Bucharest Stock Exchange (BVB) after the company failed to attract sufficient investor interest. The company blamed “the geopolitical, macroeconomic and financial market context.”
The company planned to raise €85m by selling 42% of its shares and issuing new shares equal to 21% of the existing number of shares in BVB’s biggest IPO to date.
The listing flop comes as BVB prepares for the groundbreaking listing of up to 20% of power group Hidroelectrica, which is expected in the next few months. Franklin Templeton, the manager of Fondul Proprietatea, which owns the 20 percent state stake in Hidroelectrica, advocated a dual listing in Bucharest and London, saying the local market was not liquid enough, but its shareholders voted in favor of the proposal backed by Romanian authorities to a single listing in Romania.
The company has not disclosed details, such as the total number of subscriptions made by institutional investors, who have been allocated 90% of the IPO. Private investors subscribed only 52% of the tranche allotted to them.
The European Bank for Reconstruction and Development (EBRD) holds a 12.7% stake in Agricover and planned to sell a 10% stake in the IPO.
With a maximum IPO price of RON 0.5 per share, Agricover Holding would have been valued at RON 1.08 billion (€218 million).
The pre-issuance valuation of RON 950 million (€190 million) represents 10.4 times the group’s net profit in 2022, which was RON 91.3 million (€18.0 million).
The IPO, conducted by Wood & Company in conjunction with local brokerage firm Tradeville, began May 4 and ended May 16.
The company was founded by Jabbar Kanani, who wanted to sell 32% of his 87.2% stake in the company as part of the IPO.
The group has two main areas of activity: distribution of agricultural inputs through Agricover Distribution (agriculture) and specialist financing for farmers through a non-bank financial institution, Agricover Credit IFN (agricultural financing). The two segments together generate the majority of the Group’s sales and operating income.
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