Can't find what you are looking for? Usethe advanced search
01Nov2006
Advance Equity buys stake in a natural gas supplier
The private equity investor Advance Equity Holding bought a 34% stake in the natural gas supplier ENESY JSCo. This is the fourth investment project of Advance Equity, where as opposite to the other three, it will possess only a minority stake in the investee company.
Advance Equity has paid BGN 34 000 in the capital increase of ENESY to acquire 34% of the company’s equity (or 340 shares with a par value of BGN 100 each). Advance Equity will lend to ENESY about BG 600 000 in near future, explained the CEO of the holding company Mr. Ventzislav Petrov.
ENESY has been established in 2005 and currently has a share capital of BGN 100 000. The main activity of the company is supply of compressed natural gas (CNG) to end consumers in places where gas pipelines are absent. At the moment ENESY serves the regions of Sofia, Plovdiv, and Yambol. The company carries CNG in specialized bottles and batteries of bottles.
The entire investment project of Advance Equity in ENESY is structured as a combination of equity and debt. This is the first project of Advance Equity where the holding company has reached an agreement to sell its stake on the fourth year of the investment. The buyers of the shares of Advance Equity in ENESY will be the other current shareholders, who jointly possess 66% of the equity – Mr. Pavlin Nedelchev and Proximus Engineering Ltd. “The price of the buy-out is set such as to ensure that the internal rate of return to the investment of Advance Equity in this project is no less than 25% per year”, said also Petrov.
The rest of the portfolio of Advance Equity includes: Energy Invest JSCo, which manages projects in the field of the renewable energy sources; Energy Effect JSCo, which performs activities for improving the energy efficiency of buildings; and Agro Terra North JSCo, which operates in the agricultural sector. All these companies, as opposed to ENESY, are start-ups.
Advance Equity is part of the financial services group Karoll. The company structures and manages portfolio of private companies, financing their development, and exiting the investment on a later stage. The private equity investor was established in early 2006. At the end of July, 2006, it increased its capital with BGN 10 mln through an Initial Public Offering of shares on the Bulgarian Stock Exchange (BSE). Currently, the registered share capital of Advance Equity is about BGN 12 mln, divided in 11 984 284 shares with a par value of BGN 1 each. The shares have been entered into the trading system of BSE a couple of days ago, and on Tuesday there were deals with a bit more than 41 000 shares at an average market price of BGN 1.08 per share.
Advance Equity is the first Bulgarian private equity company. So far there were only foreign private equity funds investing in companies with high growth potential by acquiring equity stakes in them, financing their expansion projects, and selling the stakes some years later on. Among these funds are Global Finance and Equest.
