The company received $81.4 million for 6.25% of its shares

The results of the SPO of one of the largest operators of the oil and fat market in Ukraine - Kernel Group - exceeded the wildest expectations. The company raised $81.4 million for only 6.25% of shares, while just the day before Kernel Group expected to earn $15 million less for 10%. Analysts predict an increase in world prices for sunflower oil until the end of the year, which has a positive impact on the value of the company's shares.

Yesterday, Kernel Group reported that during an SPO on the Warsaw Stock Exchange for 241 million zlotys ($81.4 million), 6.25% of the authorized capital (F) of the holding company Kernel Holding was sold - 4.3 million shares at a price of 56 zlotys for each. The securities will begin to be listed on the stock exchange on May 5. The results of the placement exceeded the expectations of the company itself: the day before, Kernel Group announced that they planned to gain $65 million during the SPO by selling up to 10% of the UV. “We are very pleased with the level of interest that investors have shown in the company’s shares,” the Kernel Group said in a statement, citing the words of the company’s president, Andrei Verevsky.

Kernel Group (TM Shchedry Dar, Stozhar, Chumak Domashnya, Chumak Zoloto, Lyubonka) is the second largest oil producer in Ukraine. Owns three oil extraction plants, a plant for the production of refined oil, a grain transshipment terminal and 24 elevators with a simultaneous storage capacity of up to 1.7 million tons. Kernel Holding's income in the first half of the 2010 financial year amounted to $512.5 million, net profit - $82.4 million .

This is already the second SPO of Kernel Group, after which the number of free float shares of the group increased to 53.2%. Let us recall that in November 2007 the company held the largest IPO in the oil and fat industry - 38% of Kernel UV was sold for $218 million with a capitalization of $574 million. In March 2008, the company sold 9% of UV for $84 million (capitalization - $933 million). “Based on the results of the current placement, the capitalization of Kernel Group amounted to $1.49 billion,” calculated Socrates IG analyst Yaroslav Udovenko. Dmitry Ushenko from Astrum Investment Management noted that the company's share price on the stock exchange increased by 2% compared to last Wednesday - to $20.49 per share.

Kernel Group did not say where the raised funds would be sent. IG Socrates believes that they will use it to absorb Allseeds and cover the costs associated with the transaction for modernizing facilities and increasing working capital. Let us recall that in January, Kernel Group signed an option to purchase 56% of the company’s shares from Vladimir Vinnichenko and Victoria Ryabukhina for $42 million, and on February 12, an option to purchase 37.6% of the shares from Vyacheslav Petrishche and Cornelius Vries. The cost of the last package is not disclosed, but, according to Mr. Udovenko, the entire amount of the transaction is about $80 million: “Allseeds has high debt - about $150 million, this could be the reason why Kernel Group decided to finance the deal without attracting bank loans." Yaroslav Udovenko adds that Kernel Group has a debt to EBITDA ratio of 1.9, while the average in Ukraine is 2-2.3.

Analysts explain the high interest of investors in Kernel Group shares by expectations of an increase in their value. “Industry analysts predict an increase in prices for sunflower oil in the world by the end of the year, this should have a positive impact on the price of Kernel Group shares,” says Mr. Ushenko. According to him, the placement of the company can serve as a positive signal for the market - foreign investors are highly interested in shares of Ukrainian agricultural holdings.

Alena Golubeva

"Kernel Group" is prominently positioned