BECAUSE AN AGREEMENT ON THE PRICE COULDN'T BE REACHED,  The Alro Public Offer has failed

The public offer started by Vimetco and Conef for a stake of at most 53.77% of the shares of Alro Slatina (Alro) has been unsuccessful, as the issuer announced that due to the unfavorable market conditions, the shareholders, company and underwriters couldn't agree on a price for the volume of 383.79 million shares put up for sale.

"The main objective of the company and of the shareholders has constantly been to create value for shareholders by increasing the percentage of freely traded shares, to better reflect the real value of the company, through the price of Alro shares. The company and the shareholders maintain their commitment in that regard. Unfortunately, as a result of the unfavorable market conditions, Alro and its shareholders feel that in the end, the offer did not provide an opportunity to do so", the aluminum maker's notification sent to the BSE finally says.

Besides, the offer showed signs of weakness throughout its entire course.

Whereas the offer was supposed to initially be held between July 2nd - July 16th, with a maximum price of 6.18 lei/share, (for retail investors, which were being offered 15% of the shares put up for sale), over 70% higher than the market price of June 26th (the day prior to the announcement by the company that the ASF had approved the prospectus of the offer), on June 12th, the issuer announced the extension of the market operation by three working days, the cutting of the maximum subscription price at 4 lei/share, as well as the setting of the minimum price at 3.5 lei/share.

Also, the 7% discount to the offer price, which the individual investors were supposed to receive, has been extended for the entire period of the market operation, compared to the first four days only, the way it was initially set, whereas the minimal subscription on the retail tier, of 100 shares, has been eliminated.

In spite of all this, the individual investors didn't flock to buy shares of the Slatina aluminum maker. At the end of the market operation, on the retail tier, 681 orders had been placed, amounting to 9.44 million shares, representing only 16.4% of the total of shares intended for individuals.

On the secondary market, for the duration of the offer, the ALR price has fallen over 16%, as the average price of the share of the aluminum producer was, on July 19th, 3.5 lei/share (the minimum in the offer).

The issuer did not provide details on the participation of institutional investors, which had been allocated a block of shares of 85% of the shares, who were allowed to subscribe at any price between 3.5 and 4 lei.

The intermediaries of the offer have been Deutsche Bank and UBS Investment Bank, as global coordinators, whereas the Romanian Commercial Bank, BRD - Groupe Societe Generale, BT Capital Partners, Raiffeisen Centrobank and Banca IMI S.p.a, have acted as associate managers.

In the operation, Vimetco has put up for sale almost 356.89 million shares, and Conef 26.09 million shares.

Besides, Vimetco and Conef are not on their first attempt to sell Alro shares, as in 2011 they postponed the offer to sell 21% of the shares of the Slatina-based company, as the two shareholders were invoking the lack of favorable market conditions as well, back then.

The Vimetco NV, registered in Holland and controlled by Russian billionaire Vitali Machitski owns 84.19% of the aluminum maker, while Conef holds 3.77%, and the Proprietatea Fund (FP) holds 10.21% of the issuer.

In 2017, the aluminum maker made a net profit of 391 million lei, over five times higher compared to 2016, when the net result was 72 million lei.

At last week's closing price for ALR shares (3.5 lei/share), the market capitalization of the company on the BSE was 2.498 billion lei.