UniCredit Bulbank will be underwriter of the issue. The offering is expected to take place in Q1 of 2008. Profit.bg talked to Nenko Nenkov, chairman of the Board of Directors, about the group's development over the years and about possibilities of capital increases in the near future.
Mr. Nenkov, would you tell us more about the core activity of BG Agro and its subsidiaries?
The core activity of the group is agribusiness. The company controls enterprises which specialize in agriculture, trade with grain and oil-bearing seeds, distribution of fertilizers, storage, shipping and transport.
We control a well-established model of an integrated business system, which allows us to operate a closed production-realization cycle - a prerequisite for fast economic growth and competitiveness.
The BG Agro group has been among the country's top 5 exporters of grain in the past 10 years and has been enjoying an excellent reputation outside the country. We are also in the top 3 of Bulgaria's largest agricultural companies.
The group includes BG Agro Agricultural Company, BG Agro Rastitelna Zashtita, BG Agro Trade Company, BG Agro Skladovo Stopanstvo, Canopus Processing, Bulport EAD and Agri Lab Control.
What is the amount of assets controlled by Bg Agro?
The BG Agro group controls a large logistics network in the grain producing north-eastern region of the country – grain depots, transport vehicles and facilities in the port of Varna, as well as machines and equipment servicing more than 70,000 decare of land, tractors, harvesters, drills, plus laboratory equipment etc.
During the past two years we have invested 12 mln leva in the establishment of two new grain depots equipped with latest technology. Since 1999 we have adopted and been using the highly effective and environmental friendly “direct sowing” know-how.
Why did you decide to debut on the stock exchange?
The decision to go public was a natural result from the group's growing up and development. We are aiming at winning investors' trust and are also eager to see the market value of the group. Raising capital on the stock exchange would also facilitate the future funding of larger projects.
Can you disclose more details around the future listing, such as deadline, issue value (if a general meeting has already approved such), underwriter, and issue size?
BG Agro Jsc is planning a public offering of shares in the year's Q1. The company will offer up to 25% of existing shares to investors on BSE. UniCredit Bulbank has been appointed as underwriter.
What are the company's financial results for 2007 and what are the projected 2008 results?
We expect 2007 net revenue to reach 49.5 mln leva (25.308 mln euros) and profit to come to 3.8 mln leva (1.942 mln euros). In 2006 consolidated revenues amounted to 33.3 mln leva (17.026 mln euros) and profit stood at 1.2 mln leva.
In 2005 sales revenues totaled 35.9 mln leva (18.355 mln euros) and profit was 2.1 mln leva (1.073 mln euros). Our ambition for 2008 is to double the 2007 results.
Can you tell us more about your 2008 investment program?
We are ready with projects for investing in the latest agricultural equipment that require some 4 mln leva. We intend to implement those projects at the beginning of the year with the help pf EU funding via SAPARD. We are also projecting further expansion of our grain depots.
The group's investment for the period 2005 – 2007 topped 13 mln leva.
Are there any plans for a capital increase in the near future?
The company will offer up to 25% of the currently existing shares. We are not planning to offer more shares in the near future. A capital increase is not impossible in the long-term perspective with the view of supporting larger projects, but it is not on our agenda at the moment.