Due to a shortage of working capital caused by pressure from law enforcement agencies, the agricultural holding Ukrlandfarming has reduced the livestock population from 52,000 to 15,700, the owner of the agricultural holding Oleh Bakhmatiuk has said.
“It also requires working capital, which, unfortunately, we do not have, because credit lines are being closed. Let’s be reasonable, it is unlikely that animal husbandry will recover,” he said in an interview with Interfax-Ukraine. Bakhmatiuk said that the number of employees in animal husbandry decreased by 7,000, while in the Avangard sub-holding, which produces eggs and egg products by 5,500.
“At the peak there were 32,200 [employees], and now it is 17,300-17,500. For a year and a half, we laid off about 13,000-13,500 people in two main areas – poultry farming and animal husbandry, because they needed borrowing. This situation was due to the reputational terror that has been waged against the company and personally me as a shareholder over the past year and a half,” the businessman said.
He said that Ukrlandfarming is trying to preserve the agricultural business, in particular, the land bank, after previously falling by 170,000 hectares, has recently stabilized at about 470,000-475,000 hectares: almost 200,000 lease agreements and 600 near settlements.
“Now we must sow, carry out the sowing campaign correctly, with no crediting at all. We have prepared for this. It is twice as difficult for us as for everyone, but we will try to pass it,” Bakhmatiuk said.
According to him, the company failed to take advantage of the rise in prices for grain and corn, because it had to sell goods quickly due to lack of working capital.
The owner of the agricultural holding said that he would try to keep the company at its current size, but if pressure continues, it is likely that it will continue to decline. “Any defense, eventually, retreats. Even if not so sharply, but if in a year and a half we lost 35% of the company, then, for sure, this year we can lose another 15% or 10%,” he said.
Bakhmatiuk said that he remains in dialogue with creditors. However, the latter negatively perceive the events around the company. “They do not support me out of great love, probably. If to take it reasonably, they do it forcibly. But they understand that if there is a loss of the company, then there will be total losses for them. I am fighting for my own, and for them,” the businessman said.
According to him, the conversion of debt into shares in this situation will not fundamentally solve the problem. “The question is not about the shareholders. They are, in fact, shareholders at the expense of loans… It is not a problem with the share capital. But the problem is that an agricultural enterprise cannot live without borrowing, because you have a cycle of six to eight months,” Bakhmatiuk said.
In his opinion, creditors will so far refrain from filing a lawsuit against the company, as this will entail a “domino effect” and the loss of 95% of invested resources. “While these constraining factors are important for them, I maintain some kind of dialog with them. But the arguments are getting smaller. You perfectly understand that the time frame is not eternal: in six months or a year the issue must be resolved,” the businessman said.
He said that Ukraine today is in the “agrarian trend” and has good opportunities to increase the export of raw materials in the coming years.
