Experts have differently assessed the geopolitical risks for the IPO of the head company of “EkoNiva” in Voronezh region
Previously Ekosem-Agrar was a limited liability company. The application for change of the organizational and legal form to JSC was sent to the trade register on July 31. General Director, founder and main shareholder of Ekosem-Agrar Stefan Durr and Financial Director Wolfgang Blaisi have been already appointed to the Board of the established JSC. Such a decision is explained in the company by the "increase of the flexibility of the company to finance future growth". The terms of public offering and the site where it will occur are not disclosed yet. It is also not known which block of shares will be offered for sale, and how much Ekosem-Agrar wants to attract in this way.
"We will inform you when the decision is made. At the moment, the company is only preparing to enter the capital market. For further development it is necessary to increase the capacity for the production of raw milk, expand the land bank to provide forages for growing livestock and actively increase processing. Investments will allow strengthening competitive advantages, becoming a fully vertically integrated company at the Federal level", said in the group of companies.
Marat Ibragimov, a senior analyst at BCS Global Markets, said that foreign investors may show great interest in the company's assets. "For the Russian stock market it would be better if the public offering took place at the Moscow stock exchange. Although the option of the Stuttgart stock exchange, where the company has already placed two issues of Eurobonds, is also possible— said Mr. Ibrahimov. - In the light of Russia's counter-sanctions on the supply of food products from Europe and the emerging policy of import substitution of agricultural products, we can expect increased interest of investors in public offering. If the company has financial statements under IFRS, the IPO can be held during the autumn, in September-November this year", Ibragimov predicted.
The analyst of "Alor broker" Alexey Antonov believes that the chances of a successful IPO by Ekosem-Agrar are quite high. "Nothing prevented entering the stock exchange of the German company, behind which there is a Russian business of its key beneficiary, 2-3 years ago. Perhaps the reason that Mr. Durr postponed IPO was some reputational risks of failure. After all, the funds attracted by Ekosem-Agrar will be received by EkoNiva, and these are investments in the Russian agricultural sector, which is developing against the background of the restrictions imposed on products from the EU. But, I think, prejudices are unlikely to neutralize the potential benefits of investments in Ekosem-Agrar, the rapid development of its assets in Russia does not stop. However, it is regrettable to note the existing probability of negative impact of geopolitical factors and sanctions risks on the IPO", Antonov said.
“EkoNiva” was founded in 1994 by entrepreneur Stefan Durr; its parent company is German Ekosem-Agrar. It is considered to be the largest producer of raw milk in Russia. It manages enterprises in Voronezh, Kursk, Ryazan, Kaluga, Orenburg, Novosibirsk and Tyumen regions. The farm has 26 livestock units: 9 dairy complexes and 17 farms.
In 2012, the structure of the group of companies “EkoNiva-APK holding” has already placed a bond loan at the Stuttgart stock exchange.
At the end of June, “EkoNiva” announced its plans to increase milk production 3.5 times by 2023-2024 — up to 5 thousand tons per day. In addition, the company intends to actively develop milk processing.
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