One day before the closing of the subscription phase for the IPO at Grup EM, which includes Electromontaj among other companies in the group, reached a subscription level of only a quarter of the total securities put up for sale. The relative caution of investors can be explained by a combination of bad memories from the past and unanswered questions from the present, according to Profit.ro.
The large number of issues listed by Profit.ro (seven) and their magnitude explain the investors’ caution.
One caveat is related to the fact that the offer is promoted by Grup EM, an entity aggregating several not-so-known companies besides Electromontaj. The creation of this “shell” is viewed with skepticism by investors.
The question of why Electromontaj was not listed raises a subsequent confusion regarding the relevance of some companies in the EM Group for the turnover of the issuer taking the step to the stock exchange. Some of these companies themselves do not meet the conditions that investors generally require from a listed company. The offering document mentions 40 litigations involving the group’s companies.
Separately, in 2013, a scandal was linked to the purchase by SIF Banat-Crișana, now Lion Capital, of corporate bonds worth RON 26.95 million issued by Romenergo.
What investors are also wary of is the commission of RON 2.50 million (almost EUR 500,000) that the intermediary would receive for a transaction that, in the event of a full subscription and at the maximum offer price, could amount to RON 77.20 million (EUR 15.15 million).
iulian@romania-insider.com
(Photo source: Andranik Hakobyan/Dreamstime.com)
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