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(NLB) outlined its IPO plans on May 15. The bank plans to proceed with an offer- ing of at least 50% of its existing ordinary shares on the Ljubljana Stock Exchange (LJSE) by mid June. NLB also plans to list global depository receipts in London.
The IPO was expected, as the Slove-
nian government had committed to re-privatising NLB, which was wholly nationalised as part of the government’s bailout of several major banks in 2013. Initially the government planned to reduce its 100% stake to 25% plus one share via an IPO in 2017. However, the European Commission endorsed, on May 11, a request from the Slovenian government for a more gradual sale of the bank: a 50% stake by the end of 2017 and a further 25% by end-2018.
Commenting on the IPO plans, Lidia Glavina, president of the manage- ment board of state holding company Slovenian Sovereign Holding (SSH), described the move as a “milestone in the state asset management strategy of the Republic of Slovenia”.
However, some popular resistance can be expected since privatisations espe- cially of major state assets are typically unpopular in Slovenia, with previous attempts to sell off companies sparking demonstrations in Ljubljana.
Most recently, MK Fintel Wind, a joint venture between Serbia’s MK Group and Italy's Fintel Energia Group, is reportedly considering an IPO on the Belgrade Stock Exchange to finance the construction of a new wind farm in northern Serbia.
The next big thing
Romania, with its positive deal flow
and outstanding 8% dividend yield, is currently in the spotlight of international investors. Yet there are signs that the Bulgarian capital market could be poised to achieve prominence too. The potential of the market was highlighted at a recent Bulgarian capital markets investor day co-hosted by the EBRD and the Bulgarian Stock Exchange in London on May 18. Bulgaria has seen two moderately suc- cessful IPOs, both by companies in the IT sector, in the last couple of years.
The first to come to the market – almost eight years since engineering and con- struction company Enemona listed in the last major pre-crisis IPO – was Bul- garia’s largest IT group Sirma in 2015. The BGN11.5mn (€5.9mn) was towards the lower end of the target range, but still provided Sirma with funds to grow further, penetrate new markets and invest in research and development.
It was followed in autumn 2016 by the IPO of Allterco, a provider of mobile services, which was oversubscribed.
The company’s main products are home automation system She and MyKi watch, which allows parents to communicate with and monitor the location of their child.
Despite the relatively small sums raised, Miroslav Stoyanov, investment banking director at Sofia-based Elana Trading, believes the two IPOs “could be consid- ered highly successful as they were con- ducted in a very tough environment”.
“Following the world financial crisis investors’ trust is a hard thing to gain back. Sirma and Allterco were the pioneers that should serve as catalysts in that process,” says Stoyanov. Not only had Bulgaria only recently emerged from the international economic crisis, the country’s financial system had also been hit by the collapse of its fourth largest bank, Corporate Commercial Bank (Corpbank) in 2014. Deposit guarantee payments had the benefit of raising the amount of cash available in the market at the time of Sirma’s IPO, but at the same time it had a damaging effect on confidence.
Ivan Takev, CEO of the Bulgarian Stock Exchange, acknowledges that “we have gone through turbulent times recently – both in Bulgaria and internationally”. However, he believes that, “these are now over and much more investment and more listings will follow”. Compa- nies from Bulgaria’s growing IT sector in particular are believed to be consid- ering a debut on the stock exchange, while there are hopes that regulatory obstacles previously blocking the IPOs of major companies from the energy sector will be lifted.
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