Alro SPO intended to boost free-float and company attractiveness

The Vimetco group, held by Russian businessman Vitaly Machitsky, intends to sell 21% of its shares in aluminum smelter Alro (ALR.RO)) via a secondary public offering that could amount to over EUR140 million.
The announcement of the offering took the whole market by surprise, with this being the first time in Stock Exchange's 16-year existence when a multinational group does not delist a company but decides to sell some of its shares.
This is why the deal could be at least as important as the sale by the state of a 9.84% stake in Petrom, say brokers, because it would turn Alro into one of the leading companies on the Stock Exchange.
At present, although it is one of the biggest companies on the Stock Exchange, with a capitalization of EUR685 million, Alro is not interesting for big investment funds because of its low liquidity, with only 2% of the stock being available for trading on the Stock Exchange.
Vimetco together with Conef SA hold nearly 88% in Alro, while Fondul Proprietatea (Property Fund - FP.RO) has recently increased its stake by 10%, buying most of the shares available for sale in the last few months.
Vimetco motivated its decision through a desire to increase the free-float and implicitly the company's attractiveness.
"We intend that the SPO would allow Alro's shareholders to capitalize on higher liquidity of their shares due to the increase in free float. The SPO will also promote Alro's business image and visibility on capital markets. Moreover, the SPO would be an opportunity for those minority shareholders who believe in Alro to increase their stake in the company, and for others to join as shareholders", said Marian N`stase, Vimetco's CFO in a report sent to the London Stock Exchange.