Editor’s note: This article was first published in July 2010. The offer terms are from 2010: 25,000 shares of Grupo Dhul S.L. at €1,200 each, a six-month subscription window, a planned plant in Jaén and about 75 jobs. Nueva Rumasa entered insolvency proceedings in 2011, and many investors in its share offers lost money. This article is kept as a historical record and is not investment advice.
Many people have doubts about investing in Nueva Rumasa, although plenty of investors think it is a sound, profitable investment. Every investor needs a minimum grasp of numbers and some intuition. In this case there’s an extra advantage: all of us in Spain know the track record of Mr. Ruiz-Mateos.
What the Nueva Rumasa investment involves
It is a capital increase that will issue 25,000 new shares in Grupo Dhul S.L., with identical voting and shareholder rights. The money is earmarked for building a new Dhul plant in Jaén to make ready-made meals for the Chef Dhul line, creating around 75 new jobs.
The offer consists of subscribing shares in Grupo Dhul S.L. at €1,200 each. The subscription period is open for six months.
If, after a year, a subscriber decides to sell their shares, they must notify Clesa, S.L. through Nueva Rumasa fifteen days in advance so that Clesa can exercise its right of first refusal, as provided in Article 29 of Spain’s Limited Liability Companies Act. This is formalized through a put option contract.
If the right isn’t exercised during that period, it can be exercised within fifteen days of the second anniversary of paying for the shares, and so on. The shares being subscribed now are estimated to appreciate by at least 8% a year.
My personal opinion
Personally, I trust the Ruiz-Mateos family as people, as businesspeople and as a group of companies. I know their history and what happened in 1983 (when the Spanish government expropriated the original Rumasa). Some people think they went bankrupt, but the reality was quite different.
They have built companies from scratch, and not only have they held on through the crisis, they are starting an expansion process at a time when many business owners are cutting staff.
In my view, it’s a good opportunity for anyone who wants to get started in investing with little money.
Again, this is my personal opinion, as a participant in the group. I’m convinced that as soon as the economy stabilizes, Nueva Rumasa will lead the Spanish market in its sector.
Update: In light of new information, we continued the discussion in a new article: About Nueva Rumasa. Our apologies.
Further reading
Featured image: Strakhov, CC BY-SA 4.0, via Wikimedia Commons.
