AutoWallis’s public offering was closed on Tuesday with success surpassing all expectations. Compared to the HUF 6-8 billion originally planned, retail and institutional investors submitted subscription applications totaling more than HUF 17 billion in the announced price range of HUF 107-122. Both retail and institutional investors will acquire shares of the automotive company of the Budapest Stock Exchange for an issue price of HUF 117, located in the top third of the price range. To accommodate part of the oversubscription, AutoWallis increased the upper limit of the planned issue from HUF 8 billion to HUF 10 billion. As a result of the regrouping, the newly issued shares were available to retail investors and to institutional investors in a total value of HUF 2.5 billion and HUF 7.5 billion, respectively, with significant amounts of demand still unmet among subscribers at this price point. The significance of the offering is shown by the fact that subscription of this magnitude has not been seen on the Budapest Stock Exchange for more than 10 years.
AutoWallis, listed in the Premium category of the Budapest Stock Exchange (BÉT), originally planned a capital increase of HUF 6-8 billion by involving retail and institutional investors, but it ended up receiving more than double the amount originally planned, with subscription applications totaling more than HUF 17 billion in the announced price range of HUF 107-122.
Retail subscriptions: In the subscription process launched on October 25, AutoWallis offered retail investors a total of HUF 1.5 billion in shares. However, on the third day of the subscription period originally planned for 16 days, retail investors submitted subscription applications of more than HUF 2.8 million, almost twice the planned amount, at the maximum price of HUF 122. Retail subscriptions were thus closed on October 28, without the possibility for additional oversubscription.
Institutional subscriptions: After the success of retail subscriptions, the institutional subscription period also closed with substantial oversubscription. In the subscription period opened to them on November 2, institutional investors submitted subscription applications for more than 132 million shares, which was more than double the allocated amount. In line with its preliminary announcement, AutoWallis’s primary owner, Wallis Asset Management Zrt., which locked up its own shares for one year, is participating in the subscription process as a price-taker, thus ensuring that it retains its majority ownership.
Reallocation: Based on the joint decision of the issuer and lead-manager OTP Bank, the number of shares allocated for retail sale was maximized by using the entire frame permitted by the Prospectus, and the possibility for oversubscription was also made available in its entirety during the allocation in the interest of satisfying as wide a range of investors as possible.
Issue price: Based on the subscription applications received, the issue price of the shares was uniformly set for all investors in the top third of the price range, at HUF 117, based on the subscriptions of independent market institutional investors with offers above HUF 4 billion.
The final size of the offering, future schedule: Based on the interest shown, the final amount of the subscription, planned for a maximum of HUF 8 billion, was increased by 25% to HUF 10 billion. Of this amount, retail investors and institutional investors are entitled to shares in a value of HUF 2.5 billion and HUF 7.5 billion, respectively, meaning the demand experienced in the course of the subscription process will not be met in its entirety. As the final price is less than the maximum price of HUF 122, the difference will be returned to retail investors to their payment accounts held at the lead-manager. The issuer had the new shares registered on the BÉT, which is expected to take place by November 24, 2021.
In assessment of the results of the subscription, Gábor Ormosy, CEO of AutoWallis, said that it exceeded all expectations and shows that investors recognize the growth attained by the Group since its listing on the stock exchange in 2019 and consider the growth strategy announced by the company worthy of their support. The CEO emphasized that the current offering is the beginning of a new era not only for AutoWallis but also for the entire Hungarian capital market, as the Budapest Stock Exchange has not seen subscriptions of this magnitude for more than 10 years, and in terms of the total offering value, this is the most significant transaction since 2017. Gábor Ormosy also added that a year of preparations preceded the successful offering, which involved a large team of transaction consultants providing support to the work of AutoWallis managers and employees. The contributors and consultants participating in the public offering: OTP Bank (organizer and lead-manager), Kapolyi Law Firm (legal adviser to the issuer), Front Page Communications (communications advisory), Andrékó Ferenczi Kinstellar Law Firm (legal adviser to the lead-manager), Ernst & Young Tanácsadó Kft. (financial consultant to the issuer), and PricewaterhouseCoopers Könyvvizsgáló Kft. (the issuer’s auditor).
AutoWallis Investment Director Gábor Székely highlighted that an important objective of raising capital is to increase the Company’s weight on the share market and increase the liquidity and traffic of its shares. Another important factor was to add several hundred new investors to the Company’s current investors with the purpose of supporting its growth strategy, accompanying it along the path that will allow the AutoWallis Group to become a major vehicle trading company and mobility service provider in the Central and Eastern European region by the end of the decade. The Investment Director explained that 8 institutional investors and more than 1,200 retail investors purchased shares at the issue price of HUF 117 (the company currently has almost 3,000 shareholders), meaning these targets were also exceeded. An important result is the fact that the offering raised the interest of international institutional investors as well.
History of AutoWallis’s public offering
AutoWallis’s public offering was launched on October 25 and closed on November 9: it was the first on the regulated Budapest Stock Exchange (BÉT) market since 2017 and is an important step on the Hungarian capital market not only because of the above but also due to its planned amount.
• The growth strategy presented by the AutoWallis Group is the reason for the capital increase and includes transactions, acquisitions, and developments of HUF 16-38 billion by 2025. The company’s dynamic growth is bolstered by the positive processes and successful transactions of recent years, as a result of which AutoWallis may double the revenue of HUF 88 billion achieved in 2020 by the end of the current year; thanks to continued organic growth and 1-2 transactions per year, the 2020 figures may increase more than four-fold, to more than HUF 400 billion, by the middle of the decade. The growth may also become apparent in the company’s profitability: the Company plans to increase its EBITDA by more than six times, to HUF 14-15.2 billion, by 2025.
• AutoWallis is present in 14 countries in the Central and Eastern European region with its vehicle trading and mobility service activities, and in the coming years it plans to achieve growth in three main areas: it intends to broaden its services portfolio, expand geographically its existing Retail and Services Business Unit, and continue to strengthen its Distribution Business Unit. This latter includes bolstering its role as regional consolidator and including additional international vehicle brands in the AutoWallis Group to complement the present offering of five brands. In addition to the organic expansion of the current Retail & Services Business Unit (the Group currently represents and sells 16 vehicle brands, and represents Sixt rent-a-car), the Group primarily plans on purchasing independent retail locations and repair centers that deal with more than one brand and are definitive on the market thanks to their strategic location, in addition to also creating a presence in new countries. To achieve these goals, AutoWallis is planning on property investments that support its business activities by taking into account the principles of sustainability and the Green Finance Framework. As regards services, among others AutoWallis plans to launch a regional fleet management service, implement business development based on existing synergies (used cars, financing, insurance mediation, joint procurement), develop digital sales channels and data analysis capabilities, and develop service activities and short-term vehicle rentals.
This publication is qualified as advertising according to the EU Regulation No. 1129/2017. The purpose of this publication is to ensure that all investors have access to the same regulated information and thus the Company provides total transparency and fully comply with the regulations of EU Regulation No. 1129/2017 and Act No. CXX of 2001 on the Capital Market (Tpt.). Related to the information contained in this publication the Company has published a prospectus prepared pursuant to EU Regulation No. 1129/2017 and approved by the NBH. The prospectus is publicly available on the website of the Budapest Stock Exchange (https://www.bet.hu/newkibdata/128621182/AutoWallis_Osszevont%20Tajekoztato_jovahagyott_alairt.pdf), on the website of the NBH (https://kozzetetelek.mnb.hu/downloadkozzetetel?id=661680&did=K461665/2021), on the website of the Company (https://www.autowallis.hu/hu/reszvenyjegyzes), and on the website of the distributor (https://www.otpbank.hu/portal/hu/AutoWallis_Reszvenyjegyzes).
The approval of the prospectus by the NBH does not mean the approval of the securities to be offered or the offering of those on the regulated market. In order to fully understand the potential risks and benefits of the relevant investment decision it is expedient for the investors to read the prospectus after its publication, prior to making an investment decision regarding the public offering of the shares, and prior to making an investment decision, it is worth to carefully consider the legal, taxation or pay-off consequences of a possible investment in the Company and its securities, including the benefits of the investment and the relevant risks. The Company draws the attention to the fact that the Company and its representatives assume no responsibility for investment decisions based on the conclusions drawn by investors, for its detrimental legal consequences or financial losses.