Ukrlandfarming raises land bank by a quarter

Ukraine’s largest agri-holding firm Ukrlandfarming (UKRLAN) received permission to acquire a series of agricultural companies that will enable it to boost its land bank to 670,000 ha from 532,000 ha, local media reported on September 5, citing the holding’s key owner Oleg Bakhmatyuk. All the farming assets are located in close proximity to the holding’s existing farming companies, he said. He declined to comment on deal’s value, only hinting that the price per hectare was below USD 1,000, according to the Kommersant-Ukraina newspaper.

Alexander Paraschiy: The news looks broadly neutral for Ukrlandfarming’s bond holders. On the one side, the company has enough cash resources to develop non-organically (recall, the company completed an issue of USD 500 mln in Eurobonds earlier in 2013). On the other hand, additional land plots add some more operating risks to the holding, which has increased in size 40 times over the last five years.

What we also find discouraging is Ukrlandfarming’s weak reporting practices: details on the deal were spread via mass media, while the company provided no details of its own to its investors.