Agroland Agribusiness lists bonds worth RON 10mn on the stock exchange

9/9/2021

  • The first issue of Agroland Agribusiness bonds started trading today, September 9th, on the Multilateral Trading System of the Bucharest Stock Exchange.
  • The bonds total RON 10mn in value and are traded on the stock exchange under the AAB26 ticker.
  • The Agroland Group, which includes Agroland Agribusiness, attracted more than RON 32mn from the capital market investors in 2020 and 2021, in two private placements for bonds and two private placements for shares.

 

Agroland Agribusiness (BVB:AAB), a company that went public on the AeRO market three months ago, listed today, September 9th, its first bond issue on the Multilateral Trading System (MTS). The bonds, worth RON 10mn, are traded under the AAB26 ticker. The funds attracted from the investors will be used for investments, potential mergers or acquisitions, and potential participation in start-ups in the farming business. In total, the Agroland Group, which includes Agroland Agribusiness, has attracted over RON 32mn from the capital market, in 2020 and 2021, with two private placements for bonds and two private placements for shares.

‘The listing of the Agroland Agribusiness bond issue reflects the trust the Agroland team have in the resources provided by the capital market. Three months after listing, the company appealed once more to the funding mechanisms available on the stock exchange, thus attracting investor interest in their plans for growth. Moreover, it is the fourth funding operation on the capital market for Agroland Group. We are looking forward to more listings that the two companies of the group will conduct on the stock exchange’, states Radu Hanga, President of Bucharest Stock Exchange.

‘The listing of AAB26 bonds is another step in our commitment to use capital market instruments to finance our development plans, which we have identified in this period of sustained growth that agriculture in Romania is going through. We work to accelerate the development of the company, by intensifying the pace and quantities of agricultural inputs purchased and sold, as well as to create customized products, according to our own recipes, continuing the development in the direction of grain trading. We are also considering the creation of our own range of organic products, in the context of strong support from the European Union for the development of organic crops. We will continue to be involved in the AGTech TM project in the future, after this year we offered 10,000 euros to support two companies at the beginning of the road, in which we have full confidence: Urban Agriculture Technologies, which designed an ingenious solution for growing fresh plants throughout the year, respectively ADGraft, which aims to help farmers and seedling farms to automate their production, with the help of the first Romanian robot used for grafting vegetables. We are convinced that we will achieve beautiful results, which will give satisfaction both to our team, very dedicated to business growth plans, and to shareholders and bondholders’, says Florin Radu, CEO, Agroland Agribusiness.

The company issued and sold in a private placement of bonds 100,000 corporate bonds, with a value of RON 100 per bond. The company managed to attract from investors funds worth RON 10mn, maturing on August 2nd, 2026, with an annual fixed coupon rate of 9%, payable semi-annually. During the private placement held in July this year a number of 110 investors subscribed, out of which 7 were qualified and 103 retail investors. The private placement and listing were made with the support of TradeVille.

Agroland Agribusiness shows how simple but effective ideas can be used to fund the business development at the stock exchange. Thus, after a successful issue of shares that strengthened the company capitals at the start of the year, we can see how the company may now more safely add financial leverage in the form of credit (also through the stock exchange). With flexible conditions in regard to guarantees and the use of funds, as well as a fixed interest and a 5 year reimbursement time-frame, the AAB26 bonds provide the firm with yet another way to meet its goals, while the investors gain access to an attractive investment alternative. In practice, the stock exchange opens the way to a kind of business in which both partners stand to win’, stated Ovidiu-George Dumitrescu, CFA, Deputy General Manager of TradeVille.

Agroland Agribusiness has been listed with the AeRO market since June 15th, the second company in the Agroland Group listed on the exchange. The June listing was preceded by the running of a private share placement that enabled the company to collect more than RON 6mn from investors. Its mother company Agroland Business System (BVB: AG) went public on the AeRO market on March 1st, 2021.

Agroland Agribusiness started operating in 2016 as a division of the mother company Agroland Business System, and since 2017 has been operating independently in both legal and financial terms. The company has two business lines: sale of inputs for conventional and organic agriculture and cereals trading. Agroland Agribusiness operates in the South-West of the country and aims to cover the South and West completely.

The company estimates a 33.4% turnover increase for the first half of 2021, up to about RON 13.34mn. For the same period of this year, Agroland Agribusiness estimates a RON 7.9mn net result. In 2020, Agroland Agribusiness registered revenues of RON 18.3mn (+82,8% on the previous year). The net profit was of RON 1.2mn (+231% on the previous year) with a net margin of 6.82%.