Kernel sells its southern land plots for USD 7 mln
7 October 2013
Kernel Holding (KER PW) reported on October 4 that it sold its farming operations in southern Ukraine as a part of a strategy to divest remotely located farmland. The deal value was USD 7 mln, according to the company. Kernel did not specify the amount of sold farmland, only hinting that following the deal its land bank amounted to 405,000 ha.
Alexander Paraschiy: As of June 2012, Kernel controlled nearly 20,000 ha of farmland in three southern regions of Ukraine: 6,000 ha in the Zaporizhia region (which was sold in April 2013), about 11,000 ha in the Mykolayiv region and 3,000 ha in the Odesa region. Based on the information provided by Kernel, this time it divested 12-14K hectares of land, meaning it has nearly completed the sale of all its southern land holdings. The deal-implied multiple, about USD 500-600 per hectare (by our estimates), looks cheaper than Kernel’s previous divestment in the south (USD 730/ha), but it’s within the current rental market. All in all, we do not expect the equities market will react to the deal’s announcement, as it was not a surprise and its size is not material for the company.
