Polish regulator set to clear Ukrainian group’s delisting from Warsaw exchange

A Ukrainian company, one of the world’s biggest producers of sunflower oil, is delisting from the Warsaw Stock Exchange after the Polish regulator signalled it would clear the departure.

Kernel, which went public in Poland in 2007, is the highest-profile Ukrainian company to take itself off a foreign stock exchange since Russia’s attack on Kyiv in February last year.

Although a blow to the largest bourse in central and eastern Europe, Jacek Jastrzębski, chair of the financial watchdog KNF, said the exit should be treated as “a lesson for investor education”.

Minority shareholders opposed to the move have been left powerless because Ukrainian businessman Andriy Verevskyi controls Kernel through Namsen, a Luxembourg-registered investment company.

This means he only requires the approval of the company’s directors, rather than 90 per cent of shareholders as demanded by Polish law.

The regulator was the shareholders’ last hope of stopping the exit. But it is set to clear the departure soon, according to Jastrzębski, since the Polish body is only considering whether the delisting is in accordance with applicable laws and not the business rationale of such a decision or its timing.

“Every unhappy investor is of course a threat to our market’s reputation,” he told the Financial Times.

“However, we want to have a market that is open to companies from abroad so we want to have stocks from other jurisdictions in our market.

“But the price that you may pay for this is that investors have to be aware that what they are buying — also in the Polish market — may not be exactly the same as a share in a Polish company.”

Namsen announced plans to exit in March on the grounds of insufficient liquidity and poor analyst coverage on the Warsaw exchange, prompting a dispute with some shareholders.

They dismissed Namsen’s reasons for delisting, arguing that Verevskyi just wanted to buy back his company on the cheap following a sharp drop in its valuation because of the war in Ukraine.

Kernel’s share price has fallen about 70 per cent since the start of February last year, just before Russia’s invasion.

Last year, 40 companies delisted from the Polish stock exchange, compared with 22 initial public offerings in the same period. 

Rafał Mikusiński, the KNF’s deputy chair, said that Poland was not alone among EU stock markets to face an unfavourable membership trend.

He argued this was a reflection of lower valuations and more complex European laws, including new environmental, social and governance obligations placed on listed companies.

After Namsen announced plans to delist, many fund managers divested their Kernel shares, since their regulations do not allow them to own stock in non-public companies. A month ago, Namsen had already acquired 74 per cent of Kernel’s shares.

Even though its earnings fell last year, Kernel remains a key player in a farming sector that is a cornerstone of Ukraine’s economy.

“I bought more shares for the same reason Mr Verevskyi is buying the shares — they’re massively undervalued,” said Conal Campbell, a Kernel shareholder based in Ireland. 

Some unhappy Ukrainian shareholders warn that Verevskyi’s decision to delist without their consent could also undermine foreign funding for the postwar reconstruction of their country.

“How can Ukraine ask for private investments for its reconstruction when the biggest company in the most strategic sector is trying such a cynical move to push out minority shareholders?” asked Yuliia Yehorova, a shareholder and tech recruiter in Ukraine.