October 24, 2007

Germany's KTG Agrar plans IPO on high grain prices

German farming company KTG Agrar said on Tuesday (October 23) it plans a stock market share flotation by the end of this year due to current high grain prices.

A listing is planned on Frankfurt's Entry Standard sector while the bank Equinet is lead manager and sole bookrunner.

The Hamburg-based company has around 14,000 hectares of farmland largely producing wheat, rye, barley and triticale. It is also a major producer of organic grain for flour and animal feed as well as rapeseed and corn for biofuels.

In a statement, the company said it is currently "profiting from the substantial increases in prices for agricultural products."

Grain prices in Germany and globally have risen sharply this year largely because of fears of tight global supplies.

A company spokesman said the firm believed the rise in grain prices was not a short term trend but would be sustained.

KTG Agrar declined to give further details of the issue, but the spokesman said proceeds would be largely used for corporate expansion such as the acquisition of more farmland in Germany and possibly abroad.

KTG already operates farmland in Lithuania and posted sales of 18 million euros and earnings before interest and tax (ebit) of about 2.5 million euros.

The spokesman declined to give forecasts for 2007 but said an increase was expected following the rise in grain prices.