By (News item issued on May 3 has been updated, extended)
KYIV. May 4 (Interfax-Ukraine) – Polish minority shareholders of Ukrainian agribusiness group Kernel who together control 21.7% (18,251,431) of Kernel shares and banded together to protect their rights in connection with the company’s share buyback and delisting plans terminated the agreement they signed on April 12.
The shareholders notified the company and the regulator about this, Kernel said in a statement on the Warsaw Stock Exchange (WSE).
During the time the agreement was in effect, one of the largest minority shareholders, Kopernik Global Investors LLC, which controlled 5.02% of Kernel shares, sold 189,037 shares in three blocks, reducing its stake to 4.79%, the Polish shareholders said in a published letter.
The stake of PKO BP OFE (Open Pension Fund), meanwhile, increased from 0.67% to 1.03%.
After the termination of the agreement, each party will independently make decisions and take actions regarding Kernel Holding SA.
This group of minority shareholders consisted of 15 financial investors, including OFE (Open Pension Fund) PZU with 2.03%; Uniqua OFE with 1.95%; OFE NN with 1.83%; Allianz Polska OFE, Aegon OFE with 1.15%; OFE Pocztylion, Lind Value with 6.29% and FRAM FIZ with 1.4%.
These shareholders demanded that a meeting be called to discuss Kernel’s delisting from the WSE.
The buyback from minority shareholders and subsequent delisting were proposed by Kernel’s largest shareholder and board chairman Andiy Verevsky. Kernel’s board of directors backed the proposal. The buyback offer was announced at the end of March.
Depriving shareholders of the opportunity to express their views on the delisting clearly contradicts Article 91(3) of the Polish law on public offerings, since the decision is supposed to be made by shareholders with a 9/10 majority vote in the presence of shareholders representing at least half of equity, the letter from the shareholders said.
Property remains protected by the state, as directly stated in the Polish constitution, this remains relevant given that the potential delisting forces some minority shareholders to sell shares in the offer due to funds’ legal inability to invest assets in private companies, the letter said. Pension funds cannot hold shares in companies after they stop being publicly traded on the organized market.
However, Kernel said these provisions of Polish law do not apply to it because its holding company is incorporated in Luxembourg and regulated by that country’s laws, under which a board decision is sufficient for delisting.
Verevsky’s Namsen Limited, which owns 38.05% of shares (41.29% of voting shares) in Kernel, announced an offer in late March to buy 61.95% of company shares, or 52,057,219, from other shareholders. If it buys all the shares, Namsen will spend $223.3 million on the buyback.
Before the war, Kernel ranked first in the world in the production of sunflower oil (about 7% of world production) and its export (about 12%), and was also the largest producer and seller of bottled sunflower oil in Ukraine. In addition, the company was engaged in the cultivation of other agricultural products and their sale.
