KTG Agrar decides to increase share capital by up to ten percent
- Biogas production to be expanded significantly
- Segment offers high planning certainty and high margin
Hamburg, 23 March 2010 – Pursuant to a decision taken by the Managing Board of KTG Agrar AG (ISIN DE000A0DN1J4) and endorsed by the Supervisory Board today, 23 March 2010, the company’s share capital is to be increased by an amount of up to EUR 516,000 to up to EUR 5,676,000. The share capital currently amounts to EUR 5,160,000 divided into 5,160,000 bearer shares of a nominal value of EUR 1. The increase is to be effected by issuing up to 516,000 bearer shares with profit entitlement from the financial year 2009 against cash. Existing shareholders’ subscription rights have been excluded in accordance with section 6 of the company’s statutes. The up to 516,000 new ordinary shares will be offered to German and international institutional investors by way of an accelerated bookbuilding process. Frankfurt-based DZ BANK AG will be acting as Sole Lead Manager and Sole Bookrunner on this transaction.
KTG Agrar will use the proceeds to finance its dynamic growth. While the focus in the past years was on the expansion of the company’s farmland to over 30,000 hectares, KTG Agrar will now concentrate on the biogas segment. “The conditions for the production of biogas are excellent at present,” said Siegfried Hofreiter, CEO KTG Agrar. “We want to take advantage of this situation.”
Besides the cultivation of organic and conventional agricultural resources, the production of heat and electricity from biogas has been the Hamburg-based company’s third business segment since 2007. KTG Agrar currently operates biogas plants with an electrical output of approx. 11 megawatts (MW) and intends to increase the production capacity significantly in the coming years. The reasons for this decision: high planning certainty and a high margin. Under the applicable German Renewable Energy Sources Act (EEG), a guaranteed fixed price will be paid for electricity fed into the public grid over a period of 20 years. Thanks to the synergies arising from the combination of farming and biogas production, KTG Agrar generates a margin of more than 20 percent. Says Siegfried Hofreiter: “The disproportionate growth in this segment will allow us to increase our overall profitability.” In addition, KTG Agrar intends to expand its farmland. The company wants to increase the percentage of own farmland in relation to leased farmland so as to benefit from rising prices of the scarce resource that is farmland. The company is also optimistic as regards the production of agricultural commodities. The winter grain sown in the autumn has come safely through the cold season, and the international futures exchanges indicate that the prices of grain, maize and rapeseed will increase.