This happened after the announcement of the results of the placement among existing shareholders of shares at a price of $0.2777. Minority investors stated that in this way Kernel was diluting the stake of minority shareholders.
Just 10 minutes after the opening of trading, Kernel shares fell to 8.6 zlotys!
In the first 30 minutes of trading, transactions amounting to 1.66 million zlotys were concluded from 177,850 shares.
Let us remind you that the Kernel agricultural holding of Andrei Verevsky (market capitalization of almost $282 million) decided to place shares in order to raise up to $60 million. Only actual shareholders of the company can buy back shares.
Applications were accepted until August 28, 2023. Participants had until August 31 to make the required deposit to purchase shares, and the placement was supposed to close on September 4. If the amount submitted is less than $50 million, the board of directors may cancel the offering.
“The number of shares and the issue price will be determined during the order book process, organized according to the rules of the Dutch auction, taking into account the restrictions arising from the authorized capital of the company,” Kernel said in a statement to the Warsaw Stock Exchange.
The purpose of raising funds is to reduce debt, as required by its creditors, as well as to use additional capital, the need for which arose due to the termination of the “grain agreement” and the losses caused by Russian missiles. Kernel estimates the damage from the attacks at $32 million ($20 million – damaged infrastructure in the ports of Odessa, Chernomorsk and Reni; $12 million – lost goods).
Kernel's total corporate debt is $1.4 billion. At the same time, as of July 31, 2023, the amount of funds on Kernel's balance sheet was $1.2 billion and another $327 million in unsold finished products. “The company does not have much less cash than debt,” notes Andrey Nesteruk, a strategist at the financial company Finteum. “For creditors, $60 million will not make a difference.” He suggests that the issue of shares occurs as a signal that Andrei Verevsky is ready to support the company.
