MILAN (Thomson Financial) - Landi Renzo SpA, a manufacturer of LPG and methane fuel systems for autos, said it will use the proceeds from its initial public offering to develop its overseas businesses and proceed with acquisitions.
'We intend to develop our business in India, Venezuela, China, Russia and Brazil but we will also play an active role in consolidation in our sector which at the moment is very fragmented and offers interesting opportunities,' company CEO and owner Stefano Landi said.
The CEO also said the company's dividend policy will be in line with other companies of its size listed on the Star segment in Milan.
'The payout ratio will be around 30-40 pct,' he said.
Landi Renzo's IPO, which runs from June 11-20, envisages the listing of 40 mln shares which, stripping out commissions, will raise up to 169 mln eur.
If a greenshoe option, worth around 15 pct of the total offer, is exercised the company will raise up to 202 mln eur.
If the greenshoe option is exercised the market float will be around 41 pct.
The IPO price range is 3.5-4.4 eur and the shares will be priced on June 20.
The company will debut on Milan's Star market on June 26.
Speaking at the IPO presentation, Landi said any acquisition, which could be of direct competitors or of players operating in complementary sectors, will probably be made in 2008.
'We're ready to make a significant investment in a target company which has sales of around 40-50 mln eur,' Landi said.
The CEO said China is an important GPL market for the group, as too is India which could become a centre for GPL production. He said the company will be building factories there in 2007-2008.
Pakistan, Brazil and Iran are important markets for methane-fuelled systems, Landi said.
In 2006 the company's revenues rose 50 pct on the year to 138.7 mln eur while EBITDA rose 57 pct to 30.3 mln and net profits rose 127 pct to 16.7 mln.
In the first quarter of 2007 revenues grew 14.5 pct to 37.9 mln eur. The company said new orders already secured this year will be booked mainly in the second half of the year.
In 2006 around 74 pct of sales were generated abroad.
Landi said the company's sales have grown an average 47 pct a year since 2004, adding he expected future growth to outstrip growth forecasts for the sector (2007-2012) of 18.2 pct per year.
Of the 40 mln shares being offered in the IPO, up to 12.5 mln will be new shares from a capital increase. The remaining 27.5 mln shares will be sold by Girefin, the company that currently fully owns Landi Renzo.
Girefin is 52.05 pct controlled by Stefano Landi.
'The family wants to keep control of the company,' Landi said, adding private equity had shown considerable interest in the company.
The sponsor for the Landi Renzo IPO is Mediobanca SpA. stephen.jewkes@thomson.com sj/slj COPYRIGHT Copyright AFX News Limited 2007. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.
© 2007 AFX News
