Ukrlandfarming is in talks with potential investors on raising private funds through issuance of preferred shares in the agricultural holding company Ukrlandfarming Plc (Cyprus), the Interfax Ukraine news agency reports, citing a press release by the holding company.
According to the press release, the purpose and timing of this deal are in line with the company’s plan to broaden its shareholder base prior to an initial public offering (IPO); improve transparency and corporate governance in the company; improve its balance sheet with a cash-in equity injection.
As Ukrlandfarming’s Deputy General Director Ihor Petrashko explained, the company is negotiating with major international funds that are very well known around the world. "What we are trying to do now is raise investment in the pre-IPO format, attract foreign investors in addition to Cargill in order to be better prepare for entry into the public market and improve assessment during the IPO," he said. Further details of the probable deal cannot be disclosed now, said Petrashko.
Information from Ukrlandfarming states that it is the largest agricultural holding company in Eurasia. It engages in cultivation of grain, production of eggs, egg products, and sugar, breeding of cattle, as well as in distribution of equipment, fertilizer, and seeds. Ukrlandfarming manages about 670,000 hectares of land. Most of the company’s assets are located in central and western Ukraine. The main shareholder of the agricultural holding is the head of its board of directors, Oleh Bakhmatiuk. Cargill, the world's largest commodity trader, also owns a minority stake of about 5% in Ukrlandfarming.
Previously, the company had repeatedly announced plans to sell 20-25% of its shares via an IPO on the London and Hong Kong stock exchanges. However, it later postponed these plans to 2015 because of the deterioration of the political and economic situation in Ukraine.
Ukrlandfarming’s net profit increased by 39% to USD 754.054 million in 2013, compared with 2012. Its revenue increased by 10% to USD 2.072 billion, its operating profit by 37% to USD 924.671 million, and its gross profit by 7% to USD 798.573 million.