9 июня 2015

FT: MHP MITIGATES POLITICAL RISK WITH ASSET SWAP

London-listed MHP, Ukraine's largest poultry producer, has swapped grain growing and storage assets in Russia's Voronezh region, receiving in return Ukraine-based farming operations of similar value from Agrokultura, a Swedish agribusiness with production facilities in the region.

 

Analysts said the transaction, described by MHP as a "pure swap of assets with no cash adjustments … based on equal working capital," aims to mitigate political risk.

 

The development comes on the heels of worsening bilateral Russian-Ukrainian relations in light of last year's annexation of Crimea, and the still-smouldering standoff between Kiev and Russian-backed separatists controlling breakaway eastern regions, Roman Olearchyk reports from Kiev.

 

In return for VoronezhAgro, which controls 40,000 hectares of land and 150,000 tons of grain storage capacities, MHP is to recieve Agrocultura's 60,000 hectares of land and 90,000 tons of grain storage capacities in western regions of Ukraine.

 

Bogdan Vorotilin, an analyst at Investment Capital Ukraine, a Kiev-based investment bank, noted:

 

“It is a part of a broad based move by Ukrainian businesses to exit Russia where they apparently face mounting pressure but also a distinct lack of prospects due to open hostility between the countries. Original plans envisaging broad expansion on the Russian market have mostly broke down forcing players to look for alternative options including divestment. In the near future we will probably observe more high-profile exits.”

 

Yuriy Kosyuk, MHP's founder, chief executive and majority owner, temporarily stepped aside from managing the company last year to serve as a senior official in the administration of Petro Poroshenko, Ukraine's president.

 

Source: Financial Times  

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