Home pageKdm shipping publishes prospectus and begins its public offering

Kdm shipping publishes prospectus and begins its public offering

The KDM Shipping Group, one of the leaders of the Ukrainian shipping industry, primarily involved in the niche segment of dry bulk river-sea freight in the Black, Azov and Mediterranean sea regions, published its prospectus and is beginning its public offering of shares. The Company has also signed the Placement Agreement.

KDM Shipping plans to issue up to 3 500 000 new shares and raise about USD 36 million in gross proceeds. The proceeds from the issue will be used in the first place to finance the first phase of investment program for the years 2012-2014 which envisages mainly increasing the fleet of dry bulk river-sea vessels by purchases of used vessels and investment in Group’s shipyard in Kherson, the aim of which is to triple the capacity of the shipyard and to extension of the scope of services offered.

The Company plans to be listed on the Warsaw Stock Exchange in the first half of August this year.

The Company’s advisers in the process of going public are KBC Securities N.V., Polish Branch (Lead Manager of the offering), Jaspen Capital Partners (Co-Lead Arranger of the offering), Baker & McKenzie and Dr. K. Chrysostomides & Co LLC (legal advisers). KPMG are the auditors of the Company.


  • The public offering includes up to 3 500 000 new ordinary shares issued by the Company. The Offer Shares will represent no more than 35% of the Issuer’s share capital upon completion of the Offering.
  • In the public offering in Poland, shares will be offered to institutional and retail investors.
  • Additionally, shares will be offered to international institutional investors, in frame of a private placement in certain jurisdictions outside the United States and Poland in reliance on Regulation S.
  • The Maximum Price has been set at PLN 36 per share.


19 – 24 July 2012
till 4 pm CET
Accepting subscription orders in the Retail Tranche
19 – 24 July 2012
till 4 pm CET
Bookbuilding Process
On or about 25 July 2012 Announcement of the Offer Price, the final number of the Offer Shares and the final number of the Offer Shares in each tranche
26-27 July 2012
till 2 pm CET
Accepting subscription orders in the Institutional Tranche
On or about 27 July 2012 Allotment
On or about 9 August 2012 Planned listing on the Warsaw Stock Exchange


The Group’s overall strategy is to further consolidate and expand its business within the Azov Sea, Black Sea and Mediterranean Sea regional shipping market as well as expand into the new geographies. In the first stage the Group plans to expand its river-sea business segment. However, in order to be able to offer its clients a broader scope of services, the long term goal of the Group is to enter into the segment of the larger vessels that will enable the Group to transport cargo from Black and Azov Seas to more distant geographies. The investment program planned for 2012-2014 is intended to support and accelerate revenue growth and profitability improvement in the river-sea segment as well as taking advantage of the post crisis environment to strengthen Group’s market position, by leveraging on the Group’s competitive strengths and implementing the following key elements of the strategy:

  • Expansion of Group’s shallow river-sea fleet through well-timed transactions.
  • Expansion into new markets (in terms of geography and cargo transported).
  • Expansion of Group’s ship repair business to support increased fleet and take advantage of the growing demand for repair services
  • Enhance the profitability of the Group’s ship repair business through increase of profitable ship building activity
  • Expansion of the Group’s passenger business.
  • Maintain high efficiency of the Group’s fleet.
  • Concentration on grain cargo.
  • Dedicating vessels to service certain high margin routes.
  • Maintain high fleet utilization rate and high level of cost controls with on average newer and more cost effective fleet.


The Company expects the gross proceeds from the Offering to be approximately USD 36 million. The net proceeds that the Issuer will receive from the issue of the Offer Shares in the Offering, after deducting estimated commissions, costs and expenses associated with the Offering, are estimated to be approximately USD 33.5 million. The final amount of proceeds may however change due to possible fluctuations in PLN/USD ratio.

Net proceeds from the Offering will be used in the first place to finance the first phase of investment program for the years 2012-2014 which envisages :

  • Increasing fleet by purchases of used vessels – USD 26 mln
    • Additional 6 dry cargo, river-sea vessels, of total approx. 24,000 DWT.
    • Targeting the vessels 10-15 years old, registered in Russia.
    • Concluding purchases within 3 months after IPO.
    • Taking advantage of expected growth in cargo available.
  • Investment in Group’s shipyard in Kherson - USD 7 mln USD
    • Extension of the scope of services and size of the vessels to be serviced.
    • Tripling the capacity of the shipyard.
    • Increasing the more profitable ship building activity.
    • Take advantage of lack of shipbuilding capacity resulting from Russian demand.
    • Using the shipyard for repairing and building its own fleet.


The Group’s Management believes that the Group benefits from the following competitive strengths:

  • Focus on the niche segment of river-sea freight
  • Strict standards for the fleet’s technical condition
  • Strong customer relationships with reputable charterers.
  • Own cost effective ship repair yard
  • Own crewing agency.
  • Own agency in selected ports
  • Experienced and dedicated management team
  • Solid financial performance


In 2011 the Group generated revenue of USD 29.2m and earned a net profit of USD 14.2m, compared to USD 13.9m and USD 5.1m respectively in 2010.

Groups revenue and profitability in 2011 increased and are close to pre-crisis levels of 2008 due to general increase in freight fees that resulted from lifting of the export ban on grain in Russia and tariffs in Ukraine, increase number of return cargo and decrease in the number of off-hire days, as well as by more extensive ship repair contracts and better weather influencing passenger business.

The Group also delivered strong financial performance in 2009-2010 despite difficult economic and financial situation in Ukraine and worldwide. The Group’s revenue structure in 2011 was as

Kostiantyn Molodkovets, CEO of KDM Shipping Ltd, commented: “We published our prospectus today and are beginning our public offering of shares. We want to raise proceeds from the offering, in order to accelerate realization of our growth strategy and take the fullest advantage of very good prospects for growth in dry bulk river-sea freight in the Black, Azov and Mediterranean sea regions in which we operate. We believe that investors will appreciate solid fundamentals and unique business model of our company, which since many years allow us to generate very good financial results”.