IFC approves loan of up to USD 75 mln to Mriya Agroholding

The International Finance Corporation’s board of directors approved of allocating up to USD 75 mln for Mriya Agroholding (FSE: MAYA GR) on March 31, the IFC reported yesterday. The IFC’s investment consists of a one-year working capital loan facility of up to USD 25 mln renewable twice at the end of a year for one year each time, up to USD 25 mln long-term C-Loan and up to USD 25 mln in warrants. Loan proceeds will be used to build three grain silos with a storage capacity of 100 ths mt each, purchase farm machinery and acquire the leasing rights to 165 ths ha of agricultural land. Ruslan Patlavskyy: The acquisition of the additional 165 ths ha of farmland should grow Mriya’s current land bank by 92% to 345 ths ha, making the company Ukraine’s largest land lessee. As a result of this we expect Mriya to at least double its total agricultural output by 2012-13. The construction of three grain silos with a total capacity of 300 ths tons should allow the company to smooth seasonal price volatility of grains, thus maximizing its margins and favoring profit growth. This said, the project costs total USD 214 mln, which given the company’s seasonal needs in working capital are likely to motivate Mriya’s management to go on with its plan for a secondary share placement in 2010-11.