New issues spark buying interest

TALLINN - On May 5, 2010, shares of the Premia Foods (PRF1T) public limited company started trading on the NASDAQ OMX Tallinn Stock Exchange. By means of the initial public and institutional offerings, 14.5 million Premia Foods shares priced at 14 kroons (0.89 euros), raised 203 million kroons (13 million euros). The last IPO in Estonia was made in June 2007. In addition, several companies have been de-listed from the exchange in the past 2 years due to the economic downturn.

This IPO event was made more unusual by the fact that its timing coincided with the second public offering of Ekspress Grupp, a publishing firm. This created a rare and unique opportunity for investors to invest simultaneously in two companies which are looking to raise capital. The interest displayed by investors was encouraging for both firms as well as for NASDAQ OMX, which hopes that other Estonian firms looking to raise capital will follow suit and join the 16 companies that are currently listed.

“Premia’s timing on raising capital was excellent, and the over-subscription of shares clearly indicates investors’ interest in finding new opportunities for investing funds. Add to that the fact that in the first 4 months of this year almost twice the number of trades as at the same time last year have been completed on the Tallinn Stock Exchange - this could be encouragement to all business operators considering raising capital on the Stock Exchange,” Andrus Alber, Chairman of the Management Board of the NASDAQ OMX Tallinn Stock Exchange, said.

A brief ceremony was held at the offices of NASDAQ OMX to welcome Premia Foods into the elite group of public companies in Estonia. “Premia Foods was very happy with the IPO, and we welcome all the new investors to the Premia family. We are particularly pleased at the active participation of retail investors in the subscription of Premia Foods shares and also hope that, due to the improvement in the economic environment, additional new companies will be added to the Tallinn Stock Exchange,” Kuldar Leis, Chairman of the Management Board of Premia Foods, said.  Leis attended on behalf of his firm and was joined by Mihkel Torim of Swedbank, Premia’s lead manager and financial advisor during the process of orchestrating the IPO, as well as NASDAQ OMX senior leadership and the local media.

Premia Foods is a diversified group of food companies engaged in the production and distribution of ice cream; raising, production and distribution of fish; the distribution of frozen products in the Baltic States, Scandinavia and Northwest Russia. The strategic objective of the Group is to become the leading company in the processing and sales of frozen and chilled foods in the said regions, and to that end the Group is focusing on expansion, creating synergies and increasing efficiency, says a company press release.

Individual checking and savings accounts in Estonia total over 60 million kroons. As Estonia gets closer to joining the euro zone and receiving the new currency, interest rates have gone down to as low as 1 percent, compared to savings rates of almost 6 percent just over a year ago. Estonians are looking for better investments than offered by conventional banking, and there is a belief that more companies looking to raise capital will chose to become listed on the stock exchange in the near future.