Agricover seeks to raise €85mn with one of the largest-ever IPOs on the Bucharest Stock Exchange

Agricover seeks to raise €85mn with one of the largest-ever IPOs on the Bucharest Stock Exchange
Founder Jabbar Kanani and shareholder EBRD to sell part of their stakes in offer aimed at both retail and institutional investors. / BVB
By Iulian Ernst in Bucharest May 5, 2023

Agricover, which provides inputs and financing to Romanian farmers, seeks to raise €85mn with one of the largest initial public offerings (IPOs) launched on the Bucharest Stock Exchange (BVB).

The operation consists of the sale of up to 833.3mn Agricover shares, of which almost 277.8mn will be new shares. 151.2mn shares are being sold by the European Bank for Reconstruction and Development (EBRD) and 404.3mn by Jabbar Kanani, the founder and majority shareholder of the company.

The company is thus selling 42% of its shares and issuing new shares amounting to 7.6% of the existing number of shares as part of the offer.

The IPO, which is managed by Wood & Company together with local brokerage firm Tradeville, started on May 4 and ends on May 16. The final price will be set at the end of the public subscription period, based on buying orders submitted by institutional investors.

Individual investors have been earmarked 10% of the shares made available under the IPO and they already subscribed on the first day to 5.7mn shares, or 7% of the total IPO, worth RON2.9mn at the target price of RON0.5 per share.

The remaining 90% of the shares put up for sale are intended for institutional investors, but it is possible to redistribute between tranches of no more than 10% of the securities offered.

The company was founded by Kanani, who will sell 32% of his 87.2% stake in the company under the IPO. The EBRD holds a 12.7% stake and plans to sell a 10% stake in the IPO.

The group has two main segments of activity: the distribution of agricultural inputs, carried out by Agricover Distribution (agribusiness) and the specialised financing for farmers, provided by a non-banking financial institution, Agricover Credit IFN (agri-finance). The two segments together generate the majority of the group's revenue and operating results.

Last year, Agricover recorded revenues of about RON2.55bn (€500mn), 50% more compared to 2021, and a consolidated net profit of about RON91.3mn, about 7% up y/y.