The Ministry of Finance, the sole shareholder of the international energy company Ignitis Group, will consider trading stocks of the company in the stock market. If decided, it could become the largest initial public offering (IPO) in the history of the Baltic States.
On Wednesday, November 13, Vilius Šapoka, Minister of Finance, signed the letter to form a Working group which will assess the capital raising alternatives for Ignitis Group through both national and international stock exchanges.
Minister of Finance addressed the Offices of the President and Government, the Ministry of Energy and the Ministry of Economy and Innovation to delegate their representatives to the Working group.The Working group will be assigned to assess the Company's long-term financing alternatives and their impact to the expectations of the shareholder, implementation of the National Energy Independence Strategy, the Company's long-term financial sustainability and strategy 2030, also economic, social, national security and capital market development. As a result, Working group is expected to submit recommendations to the Ministry of Finance regarding alternatives for the Company's long-term financing, including raising equity in both national and international capital markets.
“Ignitis Group is a strategic group of companies as well as a significant financial market player. Therefore, we aim to assess the long term-term financing alternatives taking into consideration possible effect to the national capital markets. We set ambitious goals for the National Energy Strategy implementation, thus we aim to continue operating in a transparent and effective manner. I believe that the Working group will provide recommendations ensuring both the development of the Group and interest of national capital markets. ”, said Vilius Šapoka, Minister of Finance of the Republic of Lithuania.
According to Darius Maikštėnas, Chairman of the Board and CEO of Ignitis Group, these changes are directly related to the Strategy 2030 which was announced by the Group last year.
“Over the next ten years the investments of the Group will amount to 6 billion euros, therefore we must consider various capital raising alternatives, including raising equity, issuing debt securities or combining both alternatives”, says Darius Maikštėnas.
The decision of the Ministry of Finance to set up a Working group is directly related to the company’s decision to inititiate delisting of the subsidiaries Energijos Skirstymo Operatorius and Ignitis Gamyba by submitting an official tender offer, followed by the mandatory redeeming of shares.
“Energijos Skirstymo Operatorius and Ignitis Gamyba, subsidiaries of the Ignitis Group, due to the low fraction of flee flow does not attract institutional investors and thus the trading is not active. Accordingly, this does not add a significant value to the development of the domestic capital market. If the Working group would recommend to implement IPO and all premissions to initiate this would be granted, this may create the possibility to attract more diverse institutional investors from international and regional markets to the Lithuanian capital market. It will also increase market liquidity and make it more attractive to small investors. Such expansion of the investor base is based on the company's Strategy 2030 to become a regional leader amongst energy companies and will help to expand the country's capital market and increase its attractiveness. By now this process is transparent and is expected to be”, claims Darius Daubaras, Chairman of the supervisory board of Ignitis Group and Senior Advisor of Saudi Aramco, the largest oil company in the world.
In order to ensure a successful listing of shares of Ignitis Group a clear equity structure for the group companies is required. This led to the decision to delist the shares of Ignitis Gamyba and ESO.
Ignitis Group will continue the dialogue with the Investors' Association to ensure a fair buy-back price. However, Ignitis Group want to disassociate form further manipulated discussions on the decisions to delist its subsidiaries impact on the Group’s transparency and the national capital markets.
Currently Ignitis Group holds 96,82% of Ignitis gamyba and 94.98% of Energijos skirstymo operatorius shares.