The subscription period of the initial public offering (IPO) of shares of the Estonian capital-based Coop Pank began on Monday and will last through Nov. 29.
During the IPO, Coop Pank will issue up to 32.2 million new shares and expects to raise €37 million of additional capital to finance its development strategy, according to a company press release.
Retail and professional investors may indicate their wish to purchase Coop Pank shares, which will range in subscription price from €1.15-1.30 per share, during the subscription period from Nov. 18-29. Depending on the final offer price, the total volume of the IPO may reach approximately €55 million.
During the IPO, the bank intends to raise an additional equity capital of €37 million in order to finance its development strategy and the expansion of its business. In the even of a successful IPO, the current equity of €57.3 million can be increased to €95.9 million.
"We want to make a share of Coop Pank a true people's share, which will be actively traded on the stock exchange and attract many shareholders," Coop Pank CEO Margus Rink said. "During the first years, we see ourselves mainly as a growing company, but according to dividend policy, beginning in spring 2022, the bank is expected to start paying out dividends in the amount of 25 percent of annual profit."
Preference to be given to customers
In case of oversubscription, preference will be given to retail investors and, above all, Coop customers, said Lauri Lind, a spokesperson for IPO financial adviser LHV.
"Preferential distribution for retail investors is valid for up to 2,500 shares, and for those who sign up during the first week — for up to 5,000 shares," Lind said. "During the IPO, however, Coop Pank wants to provide its customers with the preferential distribution of up to 10,000 shares."
Following the successful issue of its shares, Coop Pank will be listed on the main list of the Nasdaq Tallinn Stock Exchange (TSE). Trading in Coop Pank shares is expected to begin on or about Dec. 9.
SEB offering customers shares without service fee
SEB announced on Monday that it is offering is clients subscription to shares in Coop Pank for free.
"With the listing of Coop shares on the Tallinn Stock Exchange, local investors will be given another opportunity to invest on the domestic market, support Estonia's own company, and be part of the well-being of a financial institution important to our residents which stands out with extensive cash provision in rural areas — namely in places where it is still needed," Priit Tamme, head of markets at SEB, said in a press release.
A Baltic securities account (Nasdaq CSD securities account) is needed to subscribe to Coop shares, which can be opened and in which securities can be subscribed to either via one's online bank or in person at a bank branch.
Based on Estonian capital, Coop Pank is one of five universal banks operating in Estonia. It has 15 branch offices and 28 banking points throughout the country. As of the end of September, 56,300 clients were using the bank for their daily banking. The primary shareholder of the bank is domestic retail chain Coop Eesti, which comprises 330 stores.
Editor: Aili Vahtla