VILNIUS - Lithuania's largest agricultural investment company, Agrovaldymo Grupe, plans to hold an initial public offering in the spring of 2008 to raise capital to pursue land acquisitions and for corporate re-investment programs.
The new issue will increase share capital, which is now 5.8 million euros, by around 25 percent, said company officials. They added however that a company valuation would be done ahead of the offering to determine the current market price.
Company expansion director Robertas Cepaitis said that the funds raised through the IPO would be used to finance the company's expansion plans in Lithuania and in other Central and Eastern European countries.
Agrovaldymo Grupe has three main business activities: the acquisition of other agricultural companies, expansion of agricultural land holdings 's either through purchase or lease 's and investment for modernization of operations.
"A successful share offering would also allow us to enter the capital markets and offer an alternative to bonds as a means of raising funds for expansion," said Cepaitis.
No newcomer to international financial markets, the company in June successfully placed a 4 million euro bond, with a one year maturity. This was the company's second bond issue, with the proceeds used partly to pay off their first bond, issued in 2006.
The remainder of the June bond proceeds is targeted for "expansion of the group, with a goal to increase cultivated land up to 30,000 hectares and to build stock up to 10,000 dairy cows," said Finance Director Domantas Savicius. The company now works about 25,000 hectares of land in Lithuania.
In 2006, revenue was 8.1 million euros, up 21.6 percent from 2005, with net profit of 1.4 million euros. In 2006 the company plowed more than 3.1 million euros back into operations.
As part of its foreign expansion plans, Agrovaldymo Grupe intends to change its name to Agrowill Group. The company expects to list its shares on the blue-chip Main List of the Vilnius Stock Exchange.
