On 26 October, a webinar of the local fuel and alternative energy source trader Virši (AS Virši-A and related group companies) took place. During the webinar, Jānis Vība, Chairman of the Management Board, and Vita Čirjevska, Member of the Management Board, presented the Virši initial public offering (IPO), within which residents of the Baltic states can subscribe for Virši shares until 5 November 15:30. Investors who own 100 or more shares will be able to become members of the Virši shareholder loyalty programme, which provides special offers for the purchase of fuel and other goods in the Virši station network. It is also planned to pay up to 20% of the Group's audited net profit of the previous financial year in dividends.
The recording of the webinar is available at https://www.virsi.lv/investoriem.
Private and institutional investors have the opportunity to subscribe for a total of 1,509,121 new company shares. The total number of shares may be increased by another 226,368 additional shares in case of high demand, thus the total number offered may reach up to 1,735,489 shares. The price per one share is EUR 4.49 and the minimum subscription amount is one share.
During the webinar, Jānis Vība, Chairman of the Management Board of Virši, answered the questions of the participants and explained the advantages of choosing Virši shares: “Virši has always been a local capital company that is well-known in the Latvian market, moreover, our growth is visible and appreciable to everyone. The company's path of historical development is transparent, and everyone can see that the dynamics of our finances, market shares, and turnover have experienced rapid growth. A lot of work has been done, and our future development plans are ambitious, at the same time, they are completely logical and feasible.”
As a result of the IPO, Virši plans to attract new capital of up to 6.9 million euros, directing most of the funding to improving the supply and infrastructure of alternative fuels, promoting the availability of compressed natural gas (CNG), biomethane and LNG (liquefied natural gas) and the availability of electric car charging points in Latvia. In the future, the company aims to change from a traditional network of service stations to an energy company.
The company's motivation to enter the stock exchange market is not only related to attracting new financing and the diversification of financing sources. J. Vība continues: “Listing a company on a stock exchange has many positive effects. It improves the company's corporate governance and opens additional opportunities for communication with customers, and we want to especially address the private investors to become the company's shareholders. Our global vision is that the customer, by cooperating with Virši, can provide themselves with all the necessary forms of energy, i.e., not only with fuel and electricity, but also with natural gas.”
During the webinar, Vita Čirjevska, Member of the Management Board and CFO, presented the Virši dividend policy and shareholder loyalty programme: “This year, we conducted a survey of potential investors involving almost 800 respondents throughout the Baltics, because we wanted to find out what is important for our potential shareholders of Virši. Clearly financial indicators and dividends. Therefore, we have set a goal to allocate up to 20% of net profit in dividends from the previous financial year annually. It was also important for our potential investors to receive information regarding the company's development, future forecasts, as well as special discounts for product groups. Based on this data, we have developed a loyalty programme.”
Those investors who will own 100 or more shares will be able to become members of the Virši shareholders’ benefit programme, which provides special offers for the purchase of fuel and other goods in the Virši station network. For example, a 7-cent discount per litre of fuel, a 30% discount on snacks and coffee, as well as car care products, windscreen washer fluid and car wash services.
Once every six months, Virši will offer the members of the loyalty programme to try new or special products free of charge.
While presenting the financial results of the company, V. Čirjevska emphasised that development of the company continues and that by the end of the 2021, it is planned to open four more gas stations. Compared to 2015, the sales volume of fuel and store goods has increased by 61% and 135%, respectively. V. Čirjevska continues: “We have worked hard to improve the customer experience in our stores, i.e., a new store interior concept has been introduced, and we offer new food and snack solutions, as well as vegetarian options. Virši coffee has especially earned the recognition of customers, the quality of which has been compared to the quality coffee served outside the service station competition. The financial dynamics can also be assessed as good; we are growing significantly faster than the market as the retail market share is increasing, and in terms of profit, the store's product segment is already an equal ‘partner’ of the fuel segment.”
In the first half of 2021, the company's EBITDA reached 4.5 million euros, an increase of 31%. Considering the current growth trend, Virši management believes that there is a possibility to reach 9 million EBITDA in 2021.
An important development component of Virši development plans is the climate policy of the European Union, which aims to reduce harmful emissions. The Chairman of the Management Board, Jānis Vība adds: “At present, more than 80% of the fuel consumed in the Latvian market is diesel fuel. About 15% is gasoline. About 3% is LPG, as well as CNG, with which we are rapidly advancing, for both economic and environmental reasons. For trucks, it is currently the most logical alternative to standard fuels. We are not waiting to see what happens next, but we are already taking action to promote the supply of CNG products and electric charging possibilities.”
The company also recently published its first ESG report, which is a non-financial report on the implementation of the principles of environmental, social responsibility and corporate governance. J. Vība continues: “We have started both extensive work on the transition of the Latvian transport sector to cleaner energy sources, and an in-depth environmental, social responsibility and governance assessment of Virši and its affiliates.”
Subscription for Virši shares started simultaneously in all three Baltic countries on 25 October at 10:00 EEST, and it will end on 5 November at 15:30 EEST. It is planned to announce the results of the IPO by 8 November. The trading of shares on Nasdaq Riga First North is expected to start around 11 November.
To subscribe for shares, investors must apply to their bank. Subscriptions in the Baltic States are available through Nasdaq Riga members. The full list of members is available on the stock exchange website: https://nasdaqbaltic.com/statistics/en/members.
The Virši IPO prospectus approved by the FCMC is available at: www.virsi.lv/investors.
Virši are making available a report on the Company which has been prepared on publicly available information by LHV’s independent analysts. At the same time please also note the following message. Disclosure: LHV Bank has been engaged as the financial advisor to the AS VIRŠI-A initial public offering (IPO) process. https://www.virsi.lv/nova-assets/storage/L7DdYnqd8nB6F8Tq33wdI7omF4mM6Fneexot69UU.pdf
The financial advisors of the Virši IPO process are LHV Bank and Eversheds Sutherland Bitāns.
The information contained in this announcement does not constitute investment advice or an offer. The information provided in this announcement contains general forward-looking announcements and the intentions and plans of AS Virši-A regarding the initial public offering (IPO) of shares. Any investment decision is acceptable taking into account the prospectus approved by the Latvian Financial and Capital Market Commission. Approval of the prospectus does not constitute a proposal to purchase shares.
About Virši:
AS Virši-A is the largest and fastest growing domestic fuel trader, with 26 years of experience in the Latvian fuel trade sector. Today, the Virši-A network has more than 63 service stations, of which 61 are full-service, and employs more than 627 people in all regions of Latvia.
Additional information:
Undīne Priekule
Virši communication specialist
Phone: 26866079
E-mail: undine.priekule@virsi.lv
www.virsi.lv
