Astarta No.2 shareholder to sell stake to Canadian Fairfax

Key shareholders of agricultural and sugar holding Astarta (AST PW) entered into a sales-purchase agreement with Fairfax Financial Holdings (FFH CN) to sell aggregately their 9.99% stake in Astarta, according to the company’s Aug. 26 regulatory report. The deal’s closure, conditional on some approvals, should occur by Feb. 24, 2017.

According to the agreement, a holding company belonging to Viktor Ivanchyk (Astarta’s CEO and holder of a 37.8% stake) will sell to Fairfax a 1.8% stake in Astarta. The company’s second-biggest shareholder, Valeriy Korotkov (board chairman, holding a 25.99% stake), will sell to Fairfax a 8.19% stake. Fairfax also holds an option to purchase a 9.99% stake owned by Korotkov and then the rest of Korotkov’s shares in Astarta (7.8%). On top of that, Korotkov has a right to put all of his shares to Fairfax.

That means, if the deal is fully done, the two biggest shareholders of Astarta will be Ivanchyk (36.00%) and Fairfax (27.79%).

In connection to the deal, Fairfax and Astarta concluded a relationship agreement granting the new potential investor the right to call general meetings, appoint its representatives to the Astarta board and nominate the board chairman.

Fairfax is a Toronto-listed property and casualty insurance and investment management company with USD 3.9 bln in equity investments. Last year, the holding acquired 5.35% stake in Ukrainian egg producer Ovostar Union (OVO PW).

Alexander Paraschiy: Korotkov was not involved in Astarta’s business for a long time, so his intention to sell his stake in the company is not surprising. We believe the potential entrance of a more involved large shareholder and board chairman, representing the Canadian financial group, should benefit Astarta. However, so far we do not expect any sharp changes in the company, which otherwise enjoys a safe financial position and good P&L prospects for 2016.