Polish regulator suspends proceedings to delist Kernel shares pending Luxembourg court verdict
MOSCOW. March 5 (Interfax) - The Polish Financial Supervisory Authority (PFSA) suspended administrative proceedings for the delisting of shares of Kernel (one of the largest agro-industrial groups in Ukraine), from the Warsaw Stock Exchange amid proceedings initiated by minority shareholders in the Luxembourg court on the legality of the decision by the board of directors to delist dated April 13, 2023.
The PFSA will not decide to authorize the withdrawal of the company's shares from trading on the regulated market until the Luxembourg District Court resolves the allegations made in the lawsuit, Ukrainian media reported citing the agricultural holding's statement on the Warsaw Stock Exchange.
As reported, the Namsen Limited Company belonging to the head of Kernel Andrey Verevsky, as part of the share buyout announced in March 2023 for the subsequent delisting of the agricultural holding from the Warsaw Stock Exchange, increased its share from 41.3% to 74.05%. Namsen bought 30,248,449 shares on May 12 at a price of 18.5 Polish zlotys per share (about $4.47 at the exchange rate on that day), which brought the total buyout price to about $136.1 million, while the company's IPO in 2007 took place at a price of 24 zlotys.
During the additional placement initiated by Verevsky in August last year among qualified investor-shareholders, Namsen acquired another 212,634,916 shares with a total additional placement volume of 216 million shares. The purchase price was $0.2777 per share, which corresponded to a total cost of approximately $59.1 million, and the transaction was completed on September 1. The additional placement shares are kept in registered form and will not be admitted to trading on any stock exchange, Kernel said.
Namsen subsequently purchased an additional 1.2 million shares in the company in November, or 0.4% of the total, at a price of $1.875 per share, which, including treasury shares, increased Verevsky's stake to 94.37% of voting shares.
In a Luxembourg court, a group of eight owners of 0.4% of Kernel shares challenged both the decision of the board of directors on delisting and the subsequent decisions on the additional placement of shares and Namsen's voting rights on shares of the additional issue. The first preliminary court hearing on one of the claims is scheduled for March 18.
In the lawsuit, which challenges the board's April 13, 2023 decisions to delist and repurchase shares, the plaintiffs allege the directors had a conflict of interest and lacked the necessary authority. As an alternative, minority shareholders propose to appoint an expert to assess the fairness of the share repurchase price at the tender announced by Namsen Limited on March 30, 2023, and to assess the impact of decisions made by the board of directors, including delisting, on the corporate interests of the company.
Currently, the Kernel share price on the Warsaw Stock Exchange is 13 zlotys ($3.26 at the current rate), after rising 13% on Monday.
Kernel is one of the largest producers and sellers of bottled oil in Ukraine, a major producer and exporter of sunflower oil, and is engaged in the cultivation and sale of agricultural products.
It was previously reported that Kernel earned a net profit of $299 million in the 2023 fiscal year, versus a net loss of $41 million the year before. The group's revenue decreased 35% to $3.455 billion, while EBITDA increased 2.5-fold to $544 million.