Kasela: Port of Tallinn IPO one of the most expensive in history

Head of listed company PR Foods Indrek Kasela said that the IPO of Port of Tallinn ended up as one of the costliest public offerings in history.

“More than €7 million to investment bankers and lawyers is not proportional for such a transaction. Every Estonian paid roughly five euros for the process,” Kasela wrote on social media - writes postimees.ee

Kasela finds that if something that is worth €100 is sold for €80, oversubscription is to be expected. He compared Port of Tallinn to Elering the cost of listing of which was much more modest and saving on capital expenses stretched into tens of millions that went straight into the pockets of all electricity consumers.

“An exemplary transaction in every sense,” Kasela said, pointing to the transmission network company’s €225-million IPO from early May.

Kasela is also critical of Port of Tallinn IPO share distribution. “Money stayed in the family – foreign funds were preferred as they stood closest to the bankers. More should have been made available to retail investors in the interests of liquidity. Institutions follow a buy and hold long-term strategy, and that includes Estonian pension funds. Where is the gain when an Estonian retail investor must also foot the fund management bill instead of being allowed to buy Port of Tallinn directly?” Kasela asked.

He said that the positive aspect of listing the state-owned company is improved corporate governance.

“In 2018, when Estonia has produced at least six companies worth €1 billion and a dozen firms worth several hundred million, we should not praise politicians for their courage (they are not courageous – hence the price of Port of Tallinn); rather, it is our justified expectation that we do not forget the 1990s when the state was truly bold and allowed private enterprise to prosper,” Kasela said.

“Today, we are moving in the opposite direction – national energy giant Eesti Energia is buying out private competitors, RMK has been let loose in our woods, excise duties are cutting off the economy’s air supply etc. While the greed of investors is limitless, the future of the Tallinn exchange is not converting state companies into cash; it is a meeting place of companies’ need for capital and investors’ desire to invest,” he added.

Partner at investment consultants Superia Corporate Finance, Henrik Igasta, disagrees.

Igasta said that the total cost Kasela points to is similar to international precedents, considering the goals, structure, and complexity of the port’s IPO.

He added that Kasela’s example of a €100 thing being sold for €80 is unclear. “As the transaction closed with a hefty oversubscription and share distribution followed the goal of allowing the price to go up on the immediate aftermarket, we can expect the share to trade up,” Igasta said.

Read more news of Tallinn on our site.

postimees.ee
IPO portofTAllinn
If you notice an error, highlight the text you want and press Ctrl + Enter to report it to the editor
I recommend
No recommendations yet

Comments

Post your comment to communicate and discuss this article.

Politics
Chairman of the Estonian Chamber of Commerce and Industry and one of the owners of construction group Nordecon, Toomas Luman, finds that a prime ministerial candidate should first and foremost be able to answer the question of what will become of the demographic crisis in Estonia. The businessman sees controlled introduction of foreign labor as the solution. A digital construction cluster was created in Estonia a few years back to bring innovation to the s...
Society
Last year saw 27,125 registered offenses, up 0.5 percent from the year before. Violent crime was up by 12 percent to 8,249 offenses. PHOTO: Dominic Lipinski / PA Wire / Press Association Images / Scanpix Growth was biggest for domestic violence – the police launched criminal proceedings in 3,607 cases that constitutes an increase of more than one-third – annual growth of 37 percent from 2,632 cases in 2017. At the same time, reports of domestic violence we...
Society
TALLINN - Ahead of the withdrawal of the United Kingdom from the European Union, tens of thousands of British citizens have chosen the citizenship of some other country, but only one Brit has recently chosen an Estonian citizenship. Spokespeople for the Ministry of the Interior told BNS that only one British citizen submitted an application for Estonian citizenship last year and the applicant was also granted the citizenship. Before that, no Brits had soug...
Society
TALLINN - Experts from Finland, Denmark, Norway and the Netherlands highlighted the importance of decentralization and granting local governments greater decision-making powers at a conference titled "Strong local government -- strong state?" in Tallinn on Wednesday.  All Nordic countries have chosen a model granting local governments significant decision-making powers, thus the central government does not prescribe how local governments are to fulfill the...
Society
The language learning application Drops by game developer Planb Labs, established in Estonia by Hungarian founders, was named Google Play's best app of 2018. With the number of downloads surpassing 10 million, Drops was named Google's app of the year as the revenue of Planb Labs, a company registered in Estonia, increased fivefold, CNBC said. The developer's revenue grew from €335,000 in 2017 to €1.7 million in 2018. The company's shareholders include Hung...
Society
TALLINN - The Estonian Health Board has banned the distribution of chlorine dioxide, also marketed as the Miracle Mineral Supplement (MMS), the A-component of an unused product, meaning the sodium chlorite solution, must be taken to a hazardous waste collection facility. Ester Opik, head of the Health Board's North regional department, said that the banning of the distribution of the product was caused by the fact that MMS, distributed as a cosmetics produ...
Society
Nature cannot abide a vacancy, as the saying goes. If just one year ago, Estonia was battling the sale of MMS and the practice of giving it to children, a new “miracle cure” called Advanced TRS has appeared on the market now. Even though the make-up of the substance is different, the promise to cure autism and cleanse the body of heavy metals, which kind of extreme detox is accompanied by severe side-effects, sounds all too familiar. TRS is recommended to...
Society
Allied NATO battalions will soon mark two years serving in the Baltics. They have worked better than expected but would need prepositioned heavy weaponry and a functional contingency plan in case of a crisis, a report by the International Center for Defense and Security (ICDS) finds. “We do not know how Russia would have acted had we not welcomed allies in Estonia, Latvia, Lithuania and Poland in 2017. I’m afraid they would have tested our resolve,” one of...
Society
The time of filing income tax returns is nearly upon us. The new income tax system, in effect since last year, will obligate many women who went on maternity leave toward the end of the year to make additional income tax payments, while those who give birth in the middle or at the beginning of the year have no such obligation. What this means is that some women will owe the state simply for giving birth “at the wrong time”. Laura Roop, who went on maternit...