Kharkiv-based agro-industrial group of companies NOVAAGRO Ukraine announced on October 30 that it had completed the acquisition of a 56.9% stake in AgroGeneration S.A., its press service said.
According to the press service, NOVAAGRO completed the over-the-counter acquisition of a total of 126.084 million shares from Konkur Investments Limited (Konkur) at a price of $0.036 per share, which amounted to $4.54 million. The shares were transferred on October 30, 2024.
Following the transaction, the composition of the agricultural holding’s board of directors was changed to reflect the share capital structure. It includes three new members: two executive directors representing NovaAgro, Sergiy Polumysnyi and Volodymyr Krasovskyi, and one non-executive director, Viktor Shkarban.
All previous board members, including Michael Blazer, Lev Blazer, Valery Demu, Neil Sigdu, John Shmorgun and Guillaume James, have resigned from the board.
Mr. Shkarban has been appointed Chairman of the Board of Directors of AgroGeneration, succeeding Mr. Blazer.
“These co-optations, with immediate effect, will be submitted for approval to the next annual general meeting of shareholders of AgroGeneration,” the statement said.
In addition, the new board of directors of AgroGeneration has also appointed Olga Shantyr as CEO with immediate effect. She will replace outgoing CEO Serhiy Bulavin.
Konkur Investments Limited, a subsidiary of SigmaBleyzer, has entered into a conditional agreement to sell its 56.90% stake in Ukrainian agroholding AgroGeneration to Ukrainian group of companies Novaagro.
AgroGeneration said in a statement that it is about the sale of 126.1 million shares at a price of $0.036 per share and repayment of Konkur’s debt on current operations in the amount of approximately $3.191 million.
It is noted that the completion of the transaction is subject to the approval of the transaction by the Antimonopoly Committee of Ukraine and the buyer obtaining adequate sources of financing for the acquisition.
“Given the significant instability in Ukraine, including the ongoing war, a date for completion of the transaction cannot be determined at this stage,” the statement said.
Under current French law, completion of the transaction should result in a change in the composition of AgroGeneration’s Board of Directors and trigger a mandatory public offer by Novaagro to acquire all AgroGeneration shares not already owned by it.
The price per share in the said public offer will be determined on the basis of the price per share paid for the transaction with Konkur (and taking into account the repayment of debt) and confirmed by an independent expert’s valuation report.
It is also mentioned that on July 26 a request for suspension of the listing of AgroGeneration, whose shares were listed on Euronext Paris under the ticker ALAGR, was filed. Their exchange rate on July 26 was EUR0.05 per share, whereas before the full-scale invasion the shares were quoted at up to EUR0.3, and more than a decade ago at up to EUR2.5 apiece.
It is noted that investment firm SigmaBleyzer has helped manage AgroGeneration for the past 10 years.
As reported, AgroGeneration group of companies in 2022 reduced its land bank to 30 thousand hectares from 56 thousand hectares due to Russia’s full-scale invasion of Ukraine, and received about $19 million in losses due to crop losses, damage to machinery and infrastructure, reserves, resources and other assets.
AgroGeneration was founded in 2007. The company’s land bank before the Russian military invasion amounted to 58 thousand hectares in Kharkiv region, and at the end of last year it was reduced to 30 thousand hectares due to the Russian invasion. The holding company includes seven companies after the operational restructuring carried out in the third quarter of last year in connection with the war. The point of the restructuring was to dispose of “toxic” assets with 25 thousand hectares destroyed or severely damaged due to the war, located near the Russian border, the retention of which would require more than $50 million.
AgroGeneration’s 2022 revenue fell 41.1% from pre-war 2021 to EUR25.854m and its net loss was EUR31.595m compared to a net profit of EUR14.202m a year earlier.
According to the annual report, the agroholding’s gross loss last year amounted to EUR5.608m against a gross profit of EUR32.361m in 2021, while war losses were estimated at EUR15.448m.
The company’s total debt at the end of last year was estimated at EUR18.065m, down from EUR24.599m a year earlier, while assets were valued at EUR36.391m, down from EUR82.033m a year earlier.
According to a presentation from March this year, the agroholding employs about 400 permanent staff. Last year’s harvest amounted to about 80 thousand tons of grain and oilseeds, the machinery fleet includes 33 combines and 92 tractors, storage capacity – 95 thousand tons, including two elevators.
According to the data on the website of the group of companies, 56.9% of its shares belong to Konkur Investment Ltd holding, which is part of the international investment company SigmaBleyzer, 3.3% – to Green Alliance/Gravitation holding controlled by Charles Begbeder (France), 39.8% of its shares are in free circulation.
SigmaBleyzer is based in Houston (Texas, USA) and has been operating private investments in Ukraine for over 25 years.
Novaagro Group has been operating in agribusiness on the Ukrainian and international markets since 2009. It consists of four operating companies specializing in trading, export of grain and oilseeds; cultivation; warehousing; production and sale of mixed fodder, wheat flour and granulated bran, chicken meat.
“Novaagro owns five elevators with a total capacity of 326,600 tons of one-time storage. The group has a feed mill in Chkalovskoye settlement (Kharkiv region), which produces 200-300 tons/day of products. It also has an oil extraction plant with a capacity of 180,000 tons/year.
The group includes the Nova poultry complex (Kharkiv region), which has three production sites with a capacity of 845,000 birds. The slaughterhouse has a capacity of 3,000 heads per hour.
According to the Unified State Register, the ultimate beneficiary of Novaagro Limited is Sergiy Polumisny.
Novaagro group of companies in October 2018 commissioned the first line of the Morozivka Agro poultry complex (Kharkiv region) with a capacity of 220,000 birds.
“The company announced plans for reconstruction in April of this year, and in October 2018 put into operation the first line with a capacity of 220,000 birds,” the report on the group’s website says.
At the same time, the group acquired Balakliya Poultry Breeding Company, which owns two operating poultry farms and a slaughterhouse with a capacity of 3,000 birds per hour (all facilities are located in Kharkiv region).
“Thus, after the reconstruction and acquisition of the existing sites, Morozivka Agro poultry complex consists of three poultry farms with a total capacity of 650,000 birds and a slaughter plant with a capacity of 3,000 birds per hour,” the group noted.
Novaagro group of companies has been working in agribusiness in the Ukrainian and international markets since 2009. The group includes four operating companies specializing in cultivation, sale, export of grains and oilseeds, poultry farming, warehousing, production and sale of animal feed, wheat flour, and granulated bran.
