Romanian fuel distribution firm JP Grup Oil, controlled by local businessman Jean Paul Tucan (90%), has announced plans for an IPO on the
The company estimates its business at €37mn and seeks to raise €11mn-13mn in exchange for 28.5% stake with the IPO designed to capitalise on a highly optimistic if not unrealistic growth story that relies mostly on the development of a €25mn petroleum products terminal in Constanta port.
Most of the proceeds (80%) will be used to finance the company’s working capital, 10% to develop the chain of fuel stations in retail centres (a new business line) and 10% to buy tank trucks.
The company estimates its 25mn existing shares at RON7.38 (€1.48), each, resulting in a pre-IPO valuation of €37.1mn.
The company’s turnover dropped by 25% from €60mn in 2022 to €45mn in 2023 while its net profit remained roughly steady at €1.2mn-1.3mn.
Given the past results, investors are entitled to question the valuation, which is visibly forward-oriented and reflects expectations for massive expansion after the completion of the €25mn terminal.
Nearly half of the €25mn terminal project is financed under the EU’s Large Infrastructure Operational Programme (LIOP), with the rest coming from the company’s own resources and €9mn bank loans.
JP GRup Oil wants to sell 10mn new shares at a price of RON6.5 with a 16% discount for early subscribers resulting in total proceedings of €11mn-13mn for the 28.5% stake on sale.
The company’s expansion story is highly optimistic, and there is some confusion between the targets set out in the prospectus and those mentioned by CFO Steluta Lebidov in its press release.
“Our solid results over the last ten years indicate a steady growth in turnover from RON136mn in 2014 to almost RON300mn [actually RON224mn] in 2023. Based on these figures, from 2025 our forecasts show an increase in the quantity sold from 50 thousand tonnes to 500 thousand tonnes per year, which will generate a multiplication of turnover by approximately 10 times, from RON300mn to almost RON3bn,” said Lebidov in the press release emailed to bne IntelliNews.
This indicates the company’s turnover has doubled over the past ten years and is projected to soar ten times over an unspecified period of time.
The prospectus, however, (which remains the only official document) includes only a three-year forecast and envisages a 50% y/y increase in the company’s turnover this year to RON330mn followed by 100% y/y growth rates in 2025 and 2026 – resulting in a RON1.23bn turnover in 2026.
This impressive projected three-year expansion is expected to lead to a RON52mn net profit in 2026. Even so, the turnover would have more than double to reach the RON3bn target mentioned by the company’s CFO.
“The profit increase at approximately RON80mn (€16mn) will be generated by two additional sources of revenue, specifically the services provided within
Regarding the purpose of the IPO, the company declared that most of the money (80%) would be used to finance the working capital. The rest would be used to develop the company’s fuel retail in commercial centres.
Located in the North
For comparison,
JP Grup Oil's IPO announcement follows IPOs by several other Romanian companies on the
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