Kernel files for delisting from Warsaw exchange

MOSCOW. May 16 (Interfax) - Ukrainian agribusiness group Kernel sent an application to Poland's Financial Supervision Authority on May 15 for permission to delist from the Warsaw Stock Exchange, on which the company has been trading since its IPO in 2007

The application was submitted pursuant to an April 13 board decision and applies to all company shares that are allowed to trade on the WSE regulated market, meaning 84,031,230 common shares, Ukrainian media reported, citing a company statement.

Kernel reported earlier that Andrei Verevsky's Namsen Limited, which owned 38.05% of shares (41.29% of voting shares) in the agribusiness group, had acquired only 36% of shares in an offer announced March 30 to buy all of the 61.95% or 52,057,219 of company shares it did not own. As of May 12, Namsen had purchased 30,248,449, increasing its stake to 62,222,460 shares or 74.05%.

Taking into account treasury stock, the purchased shares amounted to about 39% of votes, giving Namsen an 80.36% voting stake in the company.

The purchase price was PLN18.50 ($4.47 at current rate) per share, as previously announced, so the buyout totaled $136.1 million. Orders to sell were accepted from March 31 to May 4.

Polish minority shareholders of Kernel who together controlled 21.7% (18,251,431) of Kernel shares and banded together to protect their rights in connection with the company's share buyback and delisting plans terminated the shareholder agreement they signed on April 12 on May 2. Furthermore, the largest minority shareholder, Lind Value with over 5%, announced the sale of its stake in the buyout.

This group of minority shareholders consisted of 15 financial investors, including OFE (Open Pension Fund) PZU with 2.03%; Uniqua OFE with 1.95%; OFE NN with 1.83%; Allianz Polska OFE, Aegon OFE with 1.15%; OFE Pocztylion, Lind Value with 6.29% and FRAM FIZ with 1.4%. These shareholders demanded that a meeting be called to discuss Kernel's delisting from the WSE. After the termination of the agreement, each party independently makes decisions and takes actions regarding Kernel Holding SA

Verevsky said earlier that he believed the trading of Kernel's shares on the WSE was not cost effective, so he proposed the buyback and subsequent delisting.

In its IPO in 2007, Kernel sold its shares at PLN24 per share, which is more than the offer price in the buyout. The shares traded at prices in the range of PLN40-70.

Kernel said the main reason for the IPO was to gain access to financing for its business, and it used public offerings three more times to raise funding for its growth, in 2008, 2010 and 2011.

The majority shareholder also said that Polish minority shareholders did not want to support acquisitions made by Kernel at ratios that exceeded the market value of the company itself. As an example, he cited a general meeting in September 2022 where minority shareholders rejected the idea of creating a rescue fund to support the group's needs amid the closure of the debt market.

The company said it took this as a sign that many shareholders do not want to support the company by providing cash and maintain a short-term speculative approach to the stock market, not a long-term and strategic view of Kernel.

Namsen said that after the delisting Kernel's management will be able to focus 100% on implementing strategic plans and pursuing the company's true interests.

Kernel reported net profit down 12.6% year-on-year to $370.31 million for the first half of financial 2023 (July-December 2022) on revenue down 41.3% to $1.89 billion.

Kernel is Ukraine's largest producer and exporter of vegetable oil, and also cultivates and sells agricultural products.

The official exchange rate was PLSN4.15/$1 on May 15.