Agroland Agribusiness - the second company from the Agroland group went public on the AeRO market

6/15/2021

  • Agroland Agribusiness is the second company part of the Agroland group that went public on the AeRO market. It is also the 10th company to come on the stock exchange since the beginning of this year
  • The company carried out a private placement for selling shares in April 2021 and raised more than RON 6mn from investors
  • The group Agroland attracted more than RON 22mn on the capital market in 2020 and 2021 through three private placements, one for bonds and two for shares

Agroland Agribusiness went public today on the AeRO market of Bucharest Stock Exchange (BVB), after a private placement for shares, through which the company raised RON 6.07mn from investors. The company's shares are traded under the AAB ticker. The funds will be used to develop the company and finance investments in fixed assets, mergers & acquisitions, as well as to invest in agricultural startups.

Agroland Agribusiness is part of the group Agroland and is the second company in the group to come on the AeRO market, after the mother-company, Agroland Business System (AG), which was listed on March 1st, 2021. Agroland took its first steps on the stock exchange a year ago, on June 16, 2020, when Agroland Business System bonds (AGR25) started trading. Agroland group managed to attract overall RON 22.05mn from investors through a private placement for bonds in 2020 and other two private placements for shares carried out in 2020 and 2021 by Agroland Business System and Agroland Agribusiness.

"We are pleased with the opening of the Agroland team for the capital market, but also with the increase of the representativeness of the agribusiness segment on Bucharest Stock Exchange. Diversified investment options on the capital market are a basic element in the development of any market. Each new company that is financed through the capital market financing mechanisms contributes to the growth of the local capital market. Bucharest Stock Exchange is the right place for the development of companies, regardless the field in which they operate or the financing needs", said Radu Hanga, Bucharest Stock Exchange President.

"The listing on Bucharest Stock Exchange is a very important step for Agroland Agribusiness, for which we have been preparing for several months and which we would not have been able to do without the trust and support of investors, to whom we are grateful. The experience we have gained within the Agroland group in the last five years have helped us a lot and have shown us that listing is the best solution to harness the company's growth potential. The field in which we operate, that of inputs for organic and conventional agriculture, is a very important one for the development of Romanian agriculture. We believe that the current post-pandemic context is favorable to accelerating the expansion of Agroland Agribusiness, and listing has been the most natural step in this direction. The success we have had with the private placement has shown us that we are ready for the next stage, the listing on Bucharest Stock Exchange. I strongly believe that this is the beginning of an extraordinary stage for Agroland Agribusiness", said Florin Radu, Agroland Agribusiness CEO.

In April 2021, Agroland Agribusiness conducted a private placement in which it sold 225,000 newly issued shares, with a minimum subscription in the offer of 5,000 shares (RON 115,000). The private placement was oversubscribed by 15 times on the very first day and the final price was set at RON 27/share. The shares were bought by 154 investors, of which 25 qualified investors and the remaining 129 retail investors (5 Romanian legal entities, the rest individuals). The private placement and listing of the company on the AeRO market were carried out with the support of TradeVille as Authorized Advisor.

"We have a premiere today on the AeRO market: the daughter company of one of the issuers from the new entrepreneurial wave that becomes itself a listed company. It is also important to see that one of the segments of interest for Romanian investors is agriculture, alongside IT. As food security becomes increasingly important in the context of current climate change, it becomes essential to invest in agricultural technology. This is one of the directions in which Agroland group has been investing in recent years, and the fact that the local stock market is a source to finance such projects shows the importance of having a strong, vibrant stock exchange as an independent and neutral platform in which the brokers with initiative and know-how fulfil their role of financing the economy, a role that was so long missing from our country before 2018", said George-Ovidiu Dumitrescu, CFA, TradeVille Deputy CEO.

Agroland Agribusiness began its activity in 2016 as a division of the mother-company Agroland Business System, and from 2017 it operates independently legally and financially. The company has two business lines: the sale of inputs for conventional and organic agriculture and grain trading. In 2020, Agroland Agribusiness recorded a turnover of RON 18.44 mn (+88% compared to the previous year). Net profit achieved was RON 1.2mn (+231% compared to the previous year), with a net margin of 6.82%, up from 3.86% in 2019.

Agroland Agribusiness operates in the South-West region of Romania and aims to expand throughout the South and West. For the next three years, the company aims to develop the main business and focus on new business lines: administration and delivery of orders in the agricultural segment of organic and conventional phyto products from Agroland stores, consolidation and development of the sale of solid fertilizers and development of research and production of certified genetic material for cereal, with its own technology.

Agroland Business System owns 56% of Agroland Agribusiness shares, Radu Florin owns 24%.