Romanian fuel distribution firm JT Grup Oil launches 28.5% IPO in Bucharest

Romanian fuel distribution firm JT Grup Oil, controlled by local businessman Jean Paul Tucan (90%), estimates its business at EUR 37 million and seeks to raise EUR 11 million-13 million in exchange for 28.5% with an IPO designed to capitalise on a highly optimistic growth story that relies mostly on the development of a EUR 25 million petroleum products terminal in Constanta port.

Most of the proceeds (80%) will be used to finance the company’s working capital, 10% for developing the chain of fuel stations in retail centres (a new business line), and 10% for buying tank trucks.

The Financial Supervisory Authority (ASF) approved the Prospectus for the 10-day IPO scheduled to begin on May 28.

The company estimates its 25 million existing shares at RON 7.38 (EUR 1.48), resulting in a pre-IPO valuation of EUR 37.1 million.

The company’s turnover dropped by some 25% from EUR 60 million in 2022 to EUR 45 million in 2023, while its net profit remained roughly steady at EUR 1.2 million-1.3 million. Given the past results, investors are entitled to question the valuation, which is visibly forward-oriented and reflects expectations for massive expansion after the completion of the EUR 25 million terminal.

Nearly half of the EUR 25 million terminal project is financed under the EU’s Large Infrastructure Operational Programme (LIOP), with the rest coming from the company’s own resources and EUR 9 million bank loans.

JT Grup Oil wants to sell 10 million new shares at a price of RON 6.5 with a 16% discount for early subscribers, resulting in total proceedings of EUR 11million-13 million for the 28.5% stake on sale.

The company’s expansion story is not only highly optimistic but also inconsistent in some points.

“Our solid results over the last ten years indicate a steady growth in turnover from RON 136 million in 2014 to almost RON 300 million [actually RON 224 million] in 2023. Based on these figures, from 2025, our forecasts show an increase in the quantity sold from 50 thousand tonnes to 500 thousand tonnes per year, which will generate a multiplication of turnover by approximately 10 times, from RON 300 million to almost RON 3 billion,” according to Steluta Lebidov, CFO, JT Grup Oil [in the original press release, in English].

The turnover has thus doubled over the past ten years and is projected to soar ten times over an unspecified period of time.

The Prospectus, however, (which remains the only official document unlike the press statements) includes only a three-year forecast and envisages a 50% y/y increase in the company’s turnover this year to RON 330 million (EUR 66 million) followed by 100% y/y growth rates in 2025 and 2026 – resulting in a RON 1.23 billion (EUR 250 million) turnover in 2026.