JGL Considers Issuing New Bonds, Yellow Submarine First Issuer of Mini Bonds

Jadran – Galenski Laboratorij (JGL) announced on the Zagreb Stock Exchange that it is considering the possibility of issuing new bonds on the domestic market. They state that the proceeds from the contemplated bond issuance would be used, among other things, for refinancing the repayment of existing company bonds upon maturity as well as for other corporate needs. JGL has engaged Erste Bank and Privredna Banka Zagreb (PBZ) as joint issuing agents.

This announcement is not surprising given that, according to data from the Central Clearing Depository (SKDD), during 2023 and the current part of this year, a total of 20 companies have opted to raise capital through bond issuance, issuing 25 tranches of bonds. Of these, 12 companies issued bonds last year, and eight this year. The last to do so was the company Živa voda nekretnine, which deals with real estate trading. It was established at the end of 2019 by splitting from the company Živa voda, which produces Aquaviva water, owned by former footballer Darijo Šimić. The value of the issuance included in the depository on June 7 amounts to one million euros.

In addition to this company, this year bonds from Poslovna ulaganja, Agram leasing, Escont Partners, Interkapital, Marila Lučko, Druga Fundacija SPV, and Argumentum have also been included. Regarding the conditions offered to investors, the bond from Živa voda nekretnina matures in 2039 and yields an annual interest of 9.99 percent. An even better yield of 10.99 percent is offered by the issuance from Poslovna ulaganja, which matures in 2029. The highest yield of 12 percent among this year’s issuers is provided by the bond from Druga Fundacija SPV, which Lider already reported on earlier this year. Also interesting is the one-year issuance from Escont Partners, which yields 5.5 percent annually, while the two-year issuance yields seven percent annually. The lowest interest of 4.5 percent is offered by the four-year bond from Agram leasing.

JGL Doubles Revenue in Five Years

It seems that JGL could be next, and let us recall that this company first issued bonds back in 2007 in the amount of 125 million kuna and has since refinanced them. Then, in 2015, they issued 200 million kuna in bonds maturing in 2020, and two years later, they redeemed 70 million of those 200 million. At the end of 2019, they also issued a new 130 million kuna in bonds.

It is worth mentioning that the final unaudited results of the JGL group exceeded plans, with total business revenue for 2023 amounting to 214.2 million euros, representing an 18 percent increase compared to the previous year, and revenues have doubled in just five years. The operational profitability of the Group (EBITDA) grew faster than last year’s revenue, by 28 percent, bringing the EBITDA margin of the JGL Group to nearly 20 percent.

—

Mislav Vučić

photo

—

The growth rates of the pharmaceutical part of the business (JGL Pharma) are one percentage point higher than the Group, with achieved business revenue amounting to 180 million euros, and the company stated upon announcing business results that the reason for such strong growth is the continuation of excellent sales performance of almost all key brands. Vizol S, Meralys, Aknekutan, Prolife, and Dramina achieved double-digit sales growth, reducing Aqua Maris’s share in total sales to below one quarter.

Last year, the INTEGRA project was also completed, an investment worth 53 million euros, which increased the company’s equipment and capacities and creates conditions for further growth, for which JGL received the Lider Invest award for the best large investment earlier this month.

Mini Bonds of Yellow Submarine

Interestingly, JGL has engaged PBZ as one of the issuing agents, which today announced that it successfully acted as the sole issuing agent and investor in the corporate bond issuance of the company Yellow Submarine.

– This issuance, which is in the phase of launching and structuring fully supported by the Corporate Banking and SME ISBD Department, marks a significant milestone as Yellow Submarine is the first issuer of mini bonds (Minibonds) that has raised funds in the domestic capital market for future business growth and development. The mini bonds, issued on June 20, 2024, mature in 2031 with a total nominal value of three million euros. Mini bonds provide small and medium-sized enterprises with an alternative source of financing compared to traditional bank loans, primarily issued by small and medium-sized enterprises and traded in specialized segments of the financial market – stated the bank.

Namely, Yellow Submarine, a restaurant chain offering gourmet burgers at 20 sales locations in major Croatian cities, achieved revenues exceeding 15 million euros in 2023, and PBZ has officially introduced the framework for mini bonds in Croatia with this first issuance. – The main goal is to prepare companies for access to capital markets, especially for initial public offerings in the future, and to take a leading role in the development of domestic capital markets – stated PBZ.