AdePlast offered for sale 16.5 million shares, 33% of its share capital, in the fall of 2013. It sought to raise 58 million to 67 million lei (EUR13 million to EUR15 million) from investors to finance the opening of a basalt fiber plant.
The IPO failed because of the low interest from investors, having not reached the 70% subscription threshold required for a successful completion. The failure of the AdePlast IPO marked the fifth year during which no private company went public on the Bucharest Stock Exchange.
Meanwhile, the Bucharest Stock Exchange has started a project to reboot the alternative trading system aimed at small companies, which comes with less restrictive conditions than the main market. Any company with a minimum capitalization of EUR250,000 will be able to get on the AeRO on condition that it conduct an IPO or a private placement for at least 10% of its shares.
“We are doing quite well and we will get on the stock market. We will start on AeRO with a lower amount and then keep working and return with the big project we had,” Marcel Barbut, owner of AdePlast, said on ZF Live. The company might return to the stock market in 2016 or even sooner than that.
The factors that led to the failure of AdePlast’s IPO included the too high asking price of the shares, the debts to the banks and investors’ fear that the money raised will not go towards building the basalt fiber plant but to repaying loans to banks.
”AdePlast is paying EUR4 million to EUR5 million of its debt every year. The mistake is that they said we have EUR10 million short-term debts, but those are lines of credit financing my business. This line of credit is extended ever year, which is proof that the company is doing fine. We end each year with EUR5 million to EUR6 million in the bank,” Barbut added.
Even though it failed to raise the cash needed from the stock market, AdePlast continued its investment projects with bank loans and boosted revenue by 19% last year. The basalt fiber plant is still on hold.
“2014 was a good year for us compared with the rest of the market. AdePlast revenue rose by 18% to 19% to RON300 million because of investments. I expected to grow even more but it’s fine as it is considering the state of the market,” Barbut said.
The businessman is not that optimistic about 2015, and one of the reasons is the decline of the price of oil, the raw material used in making polystyrene. Paint and polystyrene generate 50% of AdePlast’s revenue. He expects overall sales of his company to go up 5% this year.
(English version by Loredana Fratila-Cristescu)