Norofert Group closes private placement offer within 1 day amid oversubscription and attracts 1.5 million euro from investors ahead of listing on the Bucharest Stock Exchange
July 19, 2019
On July 18th, 2019, Norofert SA, the leading Romanian producer of organic fertilizers, successfully closed the private placement offer for its shares. The offer, which begun on July 18th in the morning, closed within 8 hours of launching, thus becoming the fastest private offer to take place on Bucharest Stock Exchange in the recent history. The intermediaries to the transaction were Goldring and Tradeville, while Cornerstone Communications managed company’s investor relations.
During the private placement, the company put for sale 712,500 new shares. The offer was initially supposed to run between July 18th and August 18th, but because of the oversubscription, was closed within 8 hours as the company managed to attract the amount of 1.5 million euro (7,125,000 lei). 71 investors participated in the private placement where the minimum subscription was 50,000 lei.
We thank all the investors for the overwhelming interest in our placement. We are beyond excited to have closed the offering within less than a day and we take the trust and the support provided by the market as a confidence in our team and our capabilities. The timing for the placement could not have been better as we are just about to begin the autumn sales campaign and together with my Colleagues, we look forward to getting down to work in order to deliver the promise we have made to our shareholders. I would also like to take this opportunity to thank Mugur Ionel, Norofert’s Executive Director who joined me back in 2015 at the beginning of my journey at the helm of Norofert and for his instrumental role in making Norofert a success story and without whom we would not be celebrating today, said Vlad Popescu, President of the Board and majority shareholder at Norofert SA.
Despite the holiday season and the overall lowered liquidity, both brokerage houses managed to oversubscribe the offer following a very high interest coming from investors. The subscription rate overpassed 150% as the investors subscribed for more than 1 million shares. Provided the high interest in the offering, the company, together with the brokers, decided to introduce the pro-rata allocation, in order to be able to allow all the investors who subscribed in the private placements’ period to take a stake in the company. In line with the terms of the Offering Documents, the allocation index will be determined separately for clients of each brokerage firm.
Norofert’s story captured our interest from the first meeting and we were convinced so it would the investors’ attention. We pride ourselves in working with ambitious Romanian entrepreneurs and Norofert is the epitome of that. I am confident that yesterday’s swift success can be an inspiration and motivation for other entrepreneurs to seek the local capital markets route. We thank both the investors, as well as Vlad and the Norofert team for their trust and we look forward to continuing our collaboration in the future, attracting further capital for Norofert’s development, said Virgil Zahan, CEO of brokerage house SSIF Goldring, which was the lead broker for this transaction.
The next step will be the preparation of all the documents for admission to trading on the AeRO market of the Bucharest Stock Exchange. The shares will be available under ‘NRF’ symbol. The company aims for the first day of trading to take place in September 2019. Following the private placement, Vlad Popescu and his family hold a 64.48% stake in Norofert SA while the free-float is 35.52%. Once it floats on AeRO, Norofert will become the first ever agricultural and agro-tech company listed on the Bucharest Stock Exchange.
We are delighted to see a graduate of Tradeville’s IPO Bootcamp successfully launch an offer less than a year after their participation in our program. We hope to see more and more private companies use the Romanian capital market to finance their projects, driving innovation and boosting the economy. A big thank you! to all the investors who took part in this and to the bold organisations such as Norofert, which choose to start the transition to the publicly traded company status, said Mihaela Bîciu, President and CEO at Romania’s largest retail broker and the other member of the intermediation syndicate, SSIF Tradeville.
In 2018, Norofert Group has recorded consolidated revenues of estimated RON 10 million, an increase of 92% compared to 2017, and a net profit of RON 4 million. For 2019, in line with the information presented in the offering document, the company aims to reach revenues of RON 15 million and a profit of RON 6 million. The main driver for the increased revenues will be a new line of fertilizers for conventional farming, which the company developed in the past months and plans to begin selling starting from September this year.
We are proud to have worked with Norofert since Day 1 of their decision to list on the Bucharest Stock Exchange and that we had a unique chance to be part of this inspiring journey. The unparalleled interest coming from retail investors is a clear sign for all the Romanian SMEs who have growth potential and are in need of capital for development – that the local investors community is ready to support innovative businesses who are looking to take their business to the next level. All it takes is courage and the right partners to assist in the process, said Zuzanna Kurek, Partner at Cornerstone Communications and member of newly formed Supervisory Board of Norofert SA.
Out of capital raised, estimated 550,000 euro will be invested in purchasing modern machinery in order to optimize the production time and space in the new factory in Filipestii de Padure, 400,000 euro will be directed into growing the sales team with 15 new employees in order to cover the whole territory of Romania, 300,000 euro will be spent on high quality raw materials and building a laboratory for growing and developing own strains of bacteria, 200,000 euro on purchasing wheat seeds to provide farmers together with the fertilizers and use it for the crediting purposes and, finally, 50,000 will be invested in the homologation of the new products. The company expects to see the positive effect of the investments made with the attracted capital already at the end of 2019, as with the new production facility, Norofert will be able to increase its production tenfold as well as significantly expand its storage capability.
We are thrilled to have had the opportunity to contribute to the successful closing of the Norofert private placement in such a record time. It is a major step for the Romanian organic farming sector and NNDKP’s capital markets’ team hopes to see more innovative projects on the Romanian capital market as the one rolled out by Norofert, said Alina Radu, Partner and head of the Banking and Finance practice and Corina Dumitru, Partner (Corporate/M&A), who led the NNDKP team, which consisted of Laura Duca (Corporate Filing) and Claudia Lazăr, Associate (Corporate/M&A). NNDKP assisted Norofert in preparing the corporate structure for listing as well as provided the legal audit.
About Norofert SA
Norofert Group is a leading Romanian producer of organic agricultural products and an experienced player on the local organic farming market. Established in 2000 as a family business, the company was initially the importer of high-quality fertilizers from Western markets to Romania. In 2015, with Vlad Popescu taking up the reins, the company begun producing bio fertilizers, organic phytosanitary products such as insecticides and fungicides as well as seed and foliar treatments using its own original recipes. Between 2017 and 2019, the company has undergone rapid growth after developing a proprietary technology Bio Chain, which only uses raw vegetal, animal, bacterial materials and microorganism as ingredients of its products. In August 2018, Norofert launched a premiere on the Romanian market by introducing all its products in the form of an effervescent tablet. In July 2019, Norofert launched Norofert Fito, a new line of organic fertilizers and bio inputs for small farmers and hobby gardeners.
At the end of June, the company transferred into SA and appointed a Supervisory Board consisting of 3 members – Vlad Popescu in the capacity of the President of the Board and Cristian Logofatu (CFO & Co-founder Bittnet Group) and Zuzanna Kurek (Partner & Co-Founder at Cornerstone Communications) as board members.