Kernel seeks permission to acquire 43,000 ha farmer

The Antimonopoly Committee of Ukraine will consider
today a request of leading sunflower oil producer Kernel (KER PW, KERPW) for the
acquisition of control stakes in 13 farming companies. The target companies are
parts of Cascade Agro Group owned by Vitaliy Khomutynnyk, Interfax-Ukraine
reported on Feb. 10. The group operates a land bank of 43,000 ha in Chernihiv
and Sumy regions of Ukraine. Khomutynnyk, via Cascade Investment Fund, owns
between 5% and 10% of Kernel shares, according to Kernel’s latest annual
report.

Andriy Perederey: If the deal is successful, Kernel will increase its total land bank by
up to 8% (to 557,000 ha) and its grain storage capacity by about 4%. We
estimate the market value of the target assets at about USD 50 mln. At this
stage, while any details of the possible transaction are not available, it is
hard to estimate its possible effect on Kernel’s value.