May 18, 2023

By Lynda Kiernan-Stone, Global AgInvesting Media

Leading Romanian agribusiness Agricover has abandoned its plans to list on the Bucharest Stock Exchange, after it failed to raise sufficient capital during its IPO earlier this month.

With a target of raising EUR 85 million (US$93 million), the IPO was one of the largest ever pursued on the country’s exchange.

Agricover approached this IPO from a strong position, holding a 15.9 percent market share in crop protection products, 9.5 percent of the certified seed market, and 8.4 percent of the crop nutrition products market for 2021, as well as 6.9 percent of the total agricultural loans in Romania as of December 21, 2022. 

Despite multiple disruptions on the global and local levels, over the past three years the company has proven to be particularly resilient, posting a CAGR of 19.1 percent, 2022 revenues of approximately RON 2.55 billion (US$57 million), and net profits of RON 91.3 million (US$20.35 million). 

“Over the course of two decades, Agricover has been a steadfast supporter of farmers, providing them with access to input technologies, financing solutions and emerging digitalization, which promote sustainable and responsible agriculture in Romania,” said Jabbar Kanani, Romanian entrepreneur and company founder. 

“Our unwavering commitment to sound corporate governance principles, pragmatic and prudent management, transparency, and accountability has helped us emerge as a prominent player in the Romanian agricultural sector.”

The IPO, which had secured approval from the Romanian Financial Supervisory Authority, was scheduled to run from May 4 to May 16, and planned to sell 833.3 million shares with a subscription price of 0.5 lei (US$0.11) per share, for a maximum of 416 million lei. 

The company has not disclosed the exact results of the IPO, explained Romania-Insider, due to the fact that 90 percent of the shares were allocated to institutional investors via a book-building process, adding that public data indicates that 52 percent of the tranche was subscribed. 

“With a solid financial situation and being fully aware of the geo-political, macroeconomic and financial market context, we have taken a calculated risk,” commented Liviu Dobre, CEO, Agricover Holding.

“We will continue our plans knowing that our innovative business model will ensure profitability and growth rate pursued. We are still dedicated to meeting the highest standards of corporate governance, while continuing our commitment to promote innovation among farmers,” Dobre continued. “We want to express our gratitude to all the investors who participated in this process.”

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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