As the formalization of its acquisition of Latvian gas distribution network owner Gaso is still in process, Estonian holding company Infortar's plans to float on the stock exchange this spring will now be postponed until fall, CEO Ain Hanschmidt told ERR. The necessary approval for the acquisition of Gaso is expected to be obtained in the summer.
In March, Infortar CEO Ain Hanschmidt said, that the company would be floating on the stock exchange this spring, once its final prospectus was complete. However, Infortar's purchase of Latvian gas distribution network owner Gaso means that details of its IPO (initial public offering) will now have to be put on hold until the fall.
"The plans are the same, we want to make a public offering and go public. There was an opportunity to do so in the spring, but then there was a sudden investment opportunity, whereby we could buy the Latvian gas distribution company Gaso. Because it was such a big investment, which we necessarily had to reflect in the prospectus, the IPO has been postponed until the fall," said Hanschmidt.
In mid-April, Infortar announced that it would buy Gaso, a subsidiary of Latvijas Gāze, which owns the Latvia's natural gas distribution network. As Gaso is a company of strategic importance for the Latvian state, the sale to the Estonian company requires the approval of the Latvian government and the Competition Authority. Infortar needs this decision to be made before it can go public.
According to Hanschmidt, the necessary permits are expected to be obtained in the summer.
"The negotiations seem to be going okay, so there shouldn't be any problem. We hope that we will get (the permits) in the summer. Everybody has their own specific rules of procedure. The Competition Authority has a month to respond, and so on. We still hope that we will get them (the permits) in the near future," he said.
Infortar's takeover of Gaso will also require a rewriting of the prospectus for the share offer.
"We had the prospectus ready. (However), the prospectus only contained information about our existing businesses before (the takeover) and now Gaso has to be written into it. It was during this process that we had the choice of either investing in Gaso or not investing and going ahead with the stock exchange flotation. But we see Gaso is also a useful investment for our future investors and so that's why we decided (to buy it). As we have a similar distribution network in Estonia, but the one in Latvia is three times bigger, we saw it as a very exciting investment, which provides some positive synergy," Hanschmidt said.
Hanschmidt added that the amount of money the company plans to raise is more or less known, however it would not be right to announce it at this stage.
According to Hanschmidt, meetings with investors are currently ongoing in order to ensure the move is a success. "The issuance of shares is still mainly aimed at Estonian investors, so as to give preference to Estonians," he said.
Infortar previously announced that its aim in floating on the stock exchange is to raise funds to invest in energy and real estate projects. ""We're definitely looking for opportunities to invest in the energy sector, green energy sector — solar power stations,"," Hanschmidt said.
Infortar is Estonia's largest investment company, with a balance sheet of €1.1 billion and equity of €569 million. Infortar is active in five countries and its main areas of activity are energy, shipping and real estate. In total, the Infortar Group has 48 subsidiaries. Infortar has a 40 percent stake in AS Tallink Grupp, a 100 percent stake in AS Eesti Gaas and a large real estate portfolio.
Eesti Gaas operates in Finland, Latvia, Lithuania and Poland under the Elenger brand. The group has a total of 50,000 customers.
Infortar's current portfolio features over 100,000 square meters of real estate, including four hotels, several office buildings, a logistics center in Maardu, the Tallink Tennis Center and almost 50 hectares of land in and around Tallinn. Infortar owns the construction companies EG Ehitus, INF Ehitus and INF Infra, as well as the Estonian Mineral Resources Group (Eesti Maavarade Grupp).
Editor: Michael Cole