First IPO at Belgrade Stock Exchange by mid-2018 – Fintel Energija expects to gather EUR 15 million

The first Initial Public Offering (IPO) should be realized at the Belgrade Stock Exchange (BSE) by mid-2018, after 78 years, and the company in question is Fintel Energija a.d, a daughter-company of Fintel Energia S.p.A.

– For nine months now, there have been efforts towards to IPO process for this energy company and we expect that the Belgrade Stock Exchange might get the first IPO in the first half of the year – the director of the BSE, Sinisa Krneta, told Beta.

An amount of EUR 15 million is expected to be gathered, and the money is to be invested in the second phase of the 177-MW Kosava wind farm, as well as other projects in development.

Krneta pointed out that this might motivate both institutional and individual investors to invest money at the stock exchange in what he called the time of extremely low interest rates.

– Serbia is one of the rare post-socialist countries not to have IPOs at the stock exchange during the transition period – he reminded.

He believes that the potential of the capital market of Serbia is enormous and largely unused, as “no privatization has been carried out through the company’s entrance to the stock exchange, nor has any company collected the necessary capital by offering a part of the shares for sale, which is always the best way to get to the needed funds”.

Krneta also reminded that the institution’s struggle to have an IPO on the stock exchange and to have that kind of model used to finance development had lasted for 15 years. Due to this, the stock exchange has been directing the majority of its capacities and resources to the promotion of the IPO.

– We have identified around 40-50 companies owned by individual owners, families or partners, of which around 70% agreed to hear us tell them why it would be good for them to opt for an IPO – Krneta said and added that he was not advocating the position that an IPO is a solution to all their problems, but he emphasized that it was important to explain to company owners that it is a good way for them to continue investing in their development.

Krneta believes that a turnaround is possible and that the Serbian capital market has potential, for which reason the Belgrade Stock Exchange, with support by the European Bank for Reconstruction and Development (EBRD), started the Serbia IPO Go project, directed at the promotion and help in realizing IPOs in the sector of private companies. He explained that, for the duration of the program, until late March 2019, all the interested companies will be identified.

– The aim of the Serbia IPO Go project is to have at least two to three companies have an IPO or start preparing for it in early 2019 – Krneta says.

He expects that IPOs might enable a faster development of the Belgrade Stock Exchange, which has experienced a drop since the beginning of the world economic crisis.

The director of the BSE also sees stock trade in Serbia as jeopardized.

– There are only 31 companies in the regulated market at this moment, of which only four in the prime listing, whereas the remaining 590 companies which are also formally listed are only there in the form of non-liquid papers and are not interesting to investors, as they are not active in the market, which means that there is no turnover either – he said.

Beogradska berza a.d. Beograd

MK-Fintel Wind d.o.o. Beograd

MK Group d.o.o. Beograd

Fintel Energia Grupa Italija

EBRD Evropska banka za obnovu i razvoj Beograd

Fintel Energia Group Italy

European Bank for Reconstruction and Development

EBRD

Fintel Energija AD

Fintel Energia Spa

Kosava wind farm

initial public offering

IPO

Serbia IPO Go

wind farms in Serbia

Sinisa Krneta