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SOFIA (Bulgaria), January 7 (SeeNews) - Bulgarian children's shoes manufacturer Kolev & Kolev plans to carry out a 2.0 million levs ($1.1 million/1.0 million euro) initial public offering (IPO) to finance expansion in neighbouring Romania and marketing activities, local media reported.
Kolev & Kolev will be the first company to be listed on the Bulgarian Enterprise Accelerator Market (BEAM) - the new small and medium-sized enterprise (SME) growth market of the of the stock exchange in Sofia launched last year, Capital.bg quoted the CEO of the company, Ivan Kolev, as saying on Monday.
The company did not provide a timeline for its planned IPO.
Kolev & Kolev intends to use some 1.2 million levs of the planned proceeds from the IPO to finance its expansion in Romania, where the company sees a strong market for its products.
Kolev & Kolev's production capacity is 100,000 pairs of shoes per year but the company produces only half of that amount, as it is restricted by the size of the Bulgarian market, Kolev noted.
A study by the company has shown that Romania does not have a strong local brand for children's shoes, while the respective market there is bigger than Bulgaria's. Because of this Kolev & Kolev plans to open 8-10 physical stores in Romania in the next three years.
The company intends to use the remainder of the raised capital for a project for marketing of baby shoes.
"In 2019, we had lower turnover due to our refusal to work for foreign brands but the profit is similar to the one recorded in 2018 due to the improved production efficiency," the CEO said.
The company aims to achieve a sales growth of at least 10% in 2020 even if it fails to attract investment on the Sofia bourse.
In 2018, Kolev & Kolev generated 4.94 million levs in sales revenue, up by 3.9% compared to 2017, while its net profit rose by 36% to 142,000 levs.
(1 euro = 1.95583 levs)