"Gradus" Has Submitted To FSC Its Prospectus For Initial Public Offering Of Shares

The company announced its intention to raise 100 mln BGN capital from the Bulgarian Stock Exchange.

The producer of chicken meat and sausages "Gradus" made an important step on its way to the stock exchange. The company submitted to the Financial Supervision Commission a prospectus for an initial public offering of shares (IPO), announced its management. The company announced its intention to raise capital from the Bulgarian Stock Exchange (BSE) at the beginning of February this year. It is envisaged that the process will be finalized and that the issuance of the issue will begin by the middle of the year.

If the offer is successful, it will be the largest since 2008 and the second in the volume of the raised funds (over BGN 100 million) - the current record is held by First Investment Bank (BGN 107 million in 2007 ). The manager of the issue is First Financial Brokerage House. The listing of “Gradus” will come at a difficult time for the stock market - in the past year and a half it has entered a rather unstable period of downs and short rises, and since early February has been steadily downward. That's why the “Gradus” issue will be a test for the market, and why not a catalyst for it.

Expectations

"We are preparing for one year for the IPO and we expect to raise over 100 million leva capital. Our preliminary survey shows that the offering will attract both domestic and foreign investors. What we have seen from a number of companies currently traded on the BSE is that the entire offering usually is bought by 3-4 pension funds and there is no trade. We aim, besides institutional investors, to enter retail investors, which create the liquidity of the secondary trade," said Angel Angelov, manager of "Gradus ", in an interview with Capital.bg.

The financial statements for 2017 show the total consolidated revenues of BGN 245.8 million for the “Gradus” group and BGN 39.8 million net profit.

"We expect the assessment of the "Gradus" from the market to range between BGN 400 million and 520 million and we think that this is realistic," said Angel Angelov. This would directly place the company in the top 5 in capitalization - currently, leaders are Chimimport with 575 mln leva and Sopharma with 567 mln leva.

Intentions

According to the company's data over the last 10 years, almost BGN 150 mln have been invested in the production. The plans foresee the funds raised from the stock exchange to be invested in an investment program by 2020 for the expansion of the chicken meat facilities, for the development of the breeding egg business (in which "Gradus" is among the top three companies in the European Union and has a high margin) and the "Az yam" ("I eat") sausage product line, and for marketing and market presence.

"We do not exclude some mergers and acquisitions to sharply expand our range and variety into segments we do not attend, such as the higher price segment," Angel Angelov said in an interview with Capital.

Closed cycle

The Stara Zagora group, "Gradus" - owned by the brothers Ivan and Luka Angelov, began its business in the early 90's with the production of eggs and chicken. Today “Gradus” has a completely closed production cycle and owns a forage plant, hatchery, parent farms, broiler fattening farms, slaughterhouses, poultry processing plant, cold stores, specialized means of transport.

According to the group's information, the capacity of the meat processing units is 30,000 tons per year, the fattening farms supply 25 million broilers annually to the market, and the forage plant makes 95,000 tons of animal feed. The company produces over 115 million breeding eggs annually, exporting more than 15 countries. According to the company's data, it has the largest market share in poultry meat (35%) and chicken sausages.

The preparations for the stock exchange are going through the restructuring of the business, as the Angelov brothers have interests in different spheres - they also own the olive oil company "Biser Oliva", the wine cellar "Angelus Estates", trade with grain and others.

Owners of the future public company with equal shares are Ivan and Luka Angelov. The capital of the newly created company is BGN 221 million, formed by cash contributions of BGN 200 thousand from the two founders and non-cash contributions in the form of shares of companies already existing in the group.

Bilyana Ninova

Bilyana Ninova is a Marketing specialist, content creator and hobby photographer.

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