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MNB approves AutoWallis prospectus for public share offering

Automotive

The National Bank of Hungary (MNB) has approved the prospectus for the largest public offering in recent years, based on which on October 25 AutoWallis can launch its public offering in a value of HUF 6-8 billion, or even more in case of oversubscription, according to a press release sent to the Budapest Business Journal.

On October 13, the National Bank of Hungary approved the company’s base prospectus. The company listed in the Premium category of the Budapest Stock Exchange (BÉT) plans to raise HUF 6-8 bln in capital from retail and institutional investors. According to the company’s plans, the retail part of the offering amount to HUF 1-1.5 bln and the institutional part will be between HUF 5 and 6.5 bln (in case of oversubscription, the final issue value may be up to 25% more).

The public offering planned by AutoWallis is the first on BÉT’s regulated market since 2017, and it is an important step on the Hungarian capital market not only because of the above but also due to its planned amount. AutoWallis intends to use the net proceeds from the offering to finance its future transactions, acquisitions, and developments of up to HUF 16-38 bln by 2025 based on the growth strategy of the company.

The company’s growth is bolstered by several successful transactions in recent years, as a result of which AutoWallis may double the revenue of HUF 88 bln achieved in 2020 by the end of the current year; thanks to continued organic growth and 1-2 transactions per year, the 2020 values may increase more than four-fold, to more than HUF 400 bln, by the middle of the decade.

Gábor Ormosy, CEO of AutoWallis, emphasized that the growth may also become apparent in the company’s profitability: they plan to increase their EBITDA by more than six times, to HUF 14-15.2 bln, by 2025.

According to the press release, AutoWallis plans to achieve growth in three main areas in the upcoming years: it intends to broaden its services portfolio, expand the geographic spread of the activities of its existing retail and services business unit, and continue to strengthen its distribution business unit. This latter includes bolstering its role as regional consolidator and including additional international vehicle brands in the AutoWallis Group to extend the present offering of five brands (Isuzu, Jaguar, Land Rover, SsangYong, Opel).

In addition to the organic expansion of the current retail activity (the brands represented by the group include BMW, Dacia, Isuzu, Jaguar, Kia, Land Rover, Maserati, MINI, Nissan, Opel, Peugeot, Renault, SsangYong, Suzuki, and Toyota, as well as Saab spare vehicle parts, and Sixt rent-a-car), the group primarily plans to purchase independent retail locations and repair centers with more than one brand and who are in a dominant position on the market thanks to their strategic location, in addition to also creating a presence in new countries.

To achieve these goals, AutoWallis is planning property investments that support its business activities by taking into account the principles of sustainability and the Green Finance Framework. As regards services, among others AutoWallis says that it plans to launch a regional fleet management service, implement business development based on existing synergies (used cars, financing, insurance mediation, joint procurement), develop digital sales channels and data analysis capabilities, and develop service activities and short-term vehicle rentals.

Ormosy explained that the objective of the public offering is to increase the company’s weight on the share market and increase the liquidity and traded volume of its shares. He highlighted the fact that this will be the first time for retail investors to participate in the company’s capital increase.

In light of the company’s results and plans, he hopes that several hundred new investors will join the almost 2,800 retail investors with the purpose of supporting its growth strategy and supporting the listed automotive company in its success story, accompanying it along the path that will allow the AutoWallis Group to become a major vehicle trading company and mobility service provider in the CEE region by the end of the decade.

In case of oversubscription, the company plans to sell a maximum of 93,457,943 new shares in the proposed public offering to retail and institutional investors. Retail investors can purchase AutoWallis shares at the final price that develops in the course of the institutional book-building, within the HUF 107-122 price band, if they submit their subscription applications between October 25 and November 9, 2021 and meet the applicable conditions.

Investors can submit their subscription applications at the designated branches of OTP Bank (lead manager and lead book-runner), or via the customer service hotline or online if they already have securities account at the bank.

Institutional investors can purchase AutoWallis shares between 2 and 9 November 2021. The final price will be determined jointly by the issuer and the lead manager within the price range after the institutional book-building has been closed.

The contributors and consultants participating in the public offering planned by AutoWallis: OTP Bank (lead manager and lead book-runner), Kapolyi Law Firm (legal adviser to the issuer), Andrékó Ferenczi Kinstellar Law Firm (legal adviser to the lead manager), Front Page Communications (communications advisory), Ernst & Young Tanácsadó Kft. (the issuer’s financial consultant), PricewaterhouseCoopers Könyvvizsgáló Kft. (the issuer’s auditor).

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