Kernel Group, a world leading sunflower oil exporter, hopes to raise up to $200 million through an IPO on the Warsaw Stock Exchange in November
Ukraine’s Kernel Group, a world leading sunflower oil exporter, hopes to raise up to $200 million through an initial public offering on the Warsaw Stock Exchange in November, the Financial Times reported on Oct. 29.
Andriy Verevskiy, Kernel’s 33-year-old owner and a lawmaker from Yulia Tymoshenko’s Byut bloc, told the Financial Times the listing on the WSE “will showcase vast upside” opportunities in Ukrainian agriculture.
Kernel, which controls 35 percent of Ukraine’s sunflower oil market, has an estimated value of $500-580 million, according to the report. The group controls several sun seed crushing plants, the largest grain silo network in Ukraine and sells sunflower oil under the popular Chumak, Stozhar and Shchedriy Dar brands. The group has established itself as one of the top sunflower oil players in the world along with Cargill and Bunge, both US-based.
ING, a Dutch financial services company, is advising Kernel in the listing.
“The liquidity for a company of our size is expected to be high in Poland,” Verevskiy said in the interview. “We hope for substantial demand from Polish mutual and pension funds.”
Kernel will be the second Ukrainian company to list in Warsaw, after Astarta, a major domestic sugar producer. Astarta raised $32 million last year by floating an 18.8 percent stake.
Andriy Bulakh, a partner at the Kyiv offices of Deloitte & Touche, said Kernel’s choice of the WSE for listing is reasonable.
“Warsaw seems attractive for businessmen, because it is culturally closer to us, while London banks and investors are different in terms of business culture,” explained Bulakh.
“There is a formed base of investors who might be interested in agricultural companies.”
However, “Listing on the London Stock Exchange, either on the main market, AIM or through Global Depository Receipts, seems to be the first choice among companies in Ukraine,” according to Aaron Johnson, Partner and Transaction Support Leader at Ernst & Young Ukraine.
Verevskiy said funds raised through the IPO will be used to build new facilities for processing sun seed, rapeseed and soybean, port facilities and foreign expansion.
Bulakh estimated that more than six Ukrainian companies are currently preparing to list their stock on foreign markets.
“The major IPO boom among Ukrainian companies expected by experts will most likely happen in 2009,” he added.
