Romanian petroleum products trader JT Grup Oil (BVB: JTG) announced that only a third (3.63 million) of the 10 million shares issued by its IPO found buyers but saluted the completion of the operation and confirmed that its shares would be traded at Bucharest Exchange starting from the end of June. 

The EUR 4 million raised with the IPO out of the EUR 12 million target is still close to the EUR 5 million funds needed for the completion of the EUR 25 million petroleum products terminal (the rest of the money is either borrowed or received as a grant).

The moderate demand for JTG shares follows puzzling projections and a highly optimistic valuation of the company released by the issuer, along with the IPO prospectus.

The vast majority of the shares issued under the IPO (98%) were subscribed by early investors at RON 5.46 per share – a 16% discount from the “benchmark” price of RON 6.5. This resulted in gross proceeds of some RON 20 million (EUR 4 million). 

In exchange for the EUR 4 million, the new shareholders will get a 12.7% share (roughly 1/8) of the business estimated before the IPO at EUR 37.1 million – corresponding to a price of RON 7.38 per share and a stock of 25 million shares. 

JT Grup Oil announced in March 2024 that it completed the first phase of the EUR 25 million JT Terminal project, which is going to become the only privately owned oil terminal in Romania.

After it is 100% operational and due to the storage capacities, JT Terminal will increase the quantity of imported fuel, but also the storage and distribution capacity of fuels, covering up to one million tonnes per year compared to an annual national deficit of two and a half million tonnes.

iulian@romania-insider.com

(Photo source: the company)