ULF/Avangardco owner discloses operating parameters of his assets

Farming holding Ukrlandfarming (UKRLAN) has decreased
its land bank to about 460,000 ha as of now, from a peak level of 654,000 ha in
2013, its owner Oleg Bakhmatyuk told epravda.com.ua in an interview published
on Jan. 31. He said that the holding was able to keep under its control all 16
modern grain storage facilities, while its egg holding Avangardco (AVGR LI,
AVINPU) keeps 11 egg laying farms (out of 19 controlled in 2017). As a result of
Ukraine’s loss of control over Crimea and Donbas, Avangardco’s egg production
fell to about 4 bln,  from 7.2 bln units in 2013 (according to the
company’s report – 7.02 bln), and it fell further to 2.2-2.3 bln after the
company lost access to borrowings and the pandemic “killed export,” Bakhmatyuk
said. He estimates total debt of his businesses at about USD 2 bln, without
accrued interest. Ukrlandfarming and Avangardco last time reported on their
2017 operations.

Bakhmatyuk refused to bring any financial numbers for
the year 2021, stating that all the holding’s financial documents and related
hardware were destroyed by law enforcement bodies in 2019. However, later he
stated that the management was able to restore the accounting system in 2020.
He also said that the holding will try to do an international audit of
financials this year. 

As before, Bakhmatyuk blamed Ukraine’s power brokers
in all his problems, stating one more time that his biggest problem is a
criminal case initiated by the National Anticorruption Bureau (NABU) in 2019 under which Bakhmatyuk was arrested in absentia in 2020.
In the interview, he claimed that NABU has been interfering with his business
since 2015 (NABU started its work in April 2015).

Alexander Paraschiy: There is no
surprise in the decrease of the company’s land bank to 460,000 ha, taking into
account that such amount of land (about 457,000 ha) was utilized in its farming
operations back in 2016. Its egg production decline “after the pandemic” is not
shocking either, as comparable output (2.5 bln eggs) was recorded back in 2016,
when access to borrowing was not that bad, there was no pandemic and NABU was not
the main enemy of the company (by spring 2018, the status of Bakhmatyuk’s key
enemy was carried by the head of the NBU, which is Ukraine’s central bank). All
in all, it looks like Bakhmatyuk’s business suffered only minor loss of assets
and capacities over the last four years.