Orešković’s Bosqar in Final Stages of Preparation for Third Stock Market Listing in Five Years

Bosqar Invest (formerly Meritus Investments) is preparing for its third capital raising on the domestic capital market. The company announced earlier this week that the Public Agency for the Protection of Market Competition of the Republic of Slovenia, by its decision of September 4, approved the acquisition of the Slovenian agricultural-food company Panvita. This acquisition is valued at 50 million euros, as previously announced. The transaction was previously approved by the market competition regulator in Serbia, thus obtaining all necessary regulatory approvals, Bosqar reported.

In this context, Bosqar plans to commence activities related to increasing its share capital in accordance with the decision of the General Assembly from June 17 of this year. The funds raised through the capital increase are planned to be invested in financing the transaction. Recall that at the assembly in mid-June, it was decided to increase the share capital from 13.03 million euros to a maximum of 15.6 million euros by issuing just over 196 thousand new shares.

Share Offering at Year-End

According to the announcement, Bosqar expects that the process of increasing the share capital will be carried out in the fourth quarter of this year, subject to market conditions.

– Erste & Steiermärkische Bank, UniCredit Bank GmbH, Milan Branch, and Zagrebačka Bank are acting as joint global coordinators regarding the mentioned capital increase – the announcement states. After raising 93 million kuna in the initial public offering in August 2019, an additional 105 million kuna was raised in a secondary public offering in 2021. In that second capital raising, mandatory pension funds led the way among investors, subscribing to 65 percent of the newly issued shares.

The remainder of the capital was also contributed by institutional investors, while only 3.8 percent of the shares were subscribed by individuals. Financial market participants believe that a similar scenario will occur now regarding the investor structure and that there will certainly be no problem for Bosqar to raise the necessary 50 million euros for the purchase of Panvita. However, the assembly decision states that Bosqar’s intention in this recapitalization is to diversify and strengthen the shareholder structure. Thus, the share offering will be conducted excluding the preemptive rights of existing shareholders. Management expects this will lead to greater liquidity of the shares.

The liquidity of Bosqar’s shares is indeed quite weak, despite the potential to become one of the stars of the Zagreb Stock Exchange. However, to realize that potential, there needs to be a higher proportion of small shareholders in the structure. Besides the largest shareholder, the company Orso Global owned by the Orešković spouses, who hold over 51 percent of the shares, the other largest shareholders are mandatory and voluntary pension funds and the Fund for the Decommissioning of NEK. The top ten shareholders hold a total of 97.5 percent of the shares. Throughout this year, Bosqar’s shares have been traded for only 44 days. The semi-annual report of the Zagreb Stock Exchange shows that it achieved a turnover of 323 thousand euros in six months. For illustration, the least liquid stock among the top ten traded, Hrvatska poštanska banka, collected 5.7 million euros in turnover during that period.

Potential for a ‘New Span’

However, even with such weak liquidity, Bosqar’s shares have brought very nice profits to their owners since the IPO. The last share price is 250 euros, which is 620 percent higher than the IPO price of 260 kuna (34.5 euros). In comparison, during that period, the CROBEX index strengthened by just over 54 percent. The earnings from the price increase should also include dividends, which amounted to 2.30 euros per share this year.

– If the free float were at least 10 percent, this stock could become the new Span – one analyst told us in an unofficial conversation.

The company achieved a net profit of 1.4 million euros last year, and the acquisition of the Slovenian company should provide an additional boost to its business. Namely, Panvita is one of the leading players in the Slovenian agricultural and food market with over 700 employees, operating on 3,500 hectares of agricultural land. It operates in three key segments – primary agriculture, food sector, and sustainable energy. Panvita will become the fourth vertical of Bosqar’s business, alongside the BPTO vertical, which operates under the name Mplus, then HR business through the Workplace Group, as well as the eCommerce business vertical with the brand Eplus Ventures.

Bosqar previously announced that it expects the result of the acquisition of Panvita to be such that almost half of the estimated pro forma consolidated revenues and nearly 40 percent of the estimated pro forma consolidated adjusted EBITDA of the company will be generated by components operating outside the business process outsourcing (BPO) segment.