KYIV. Jan 25 (Interfax-Ukraine) – Kernel, a large Ukrainian agrarian group, is mulling opportunities of buying an oilseed crushing plant in Ukraine with an annual capacity of around 1 million tonnes of sunflower seeds and expanding its land bank by 200,000-250,000 ha, the founder and Board Chairman of Kernel Andriy Verevsky has said.
“We are studying the possibility of consolidating oilseed crushing facilities in Ukraine. We are interested in acquiring a medium-sized enterprise with an annual capacity of around 1 million tonnes of sunflower seeds. We assess the acquisition at some $200 million. At present we are far from the deal, as our assessments considerably differ the assessments of sellers. It is hard for me to predict when potential sellers will give their consent to sell their business. I think that it will take no more than a couple of years,” he said at the phone conferences with investors devoted to the possible placement of eurobonds.
Verevsky said that Kernel seeks to boost its land bank by 200,000-250,000 ha and assesses the investment at $150 million. He said that last year was favorable for farmers. Assessments of potential sellers today are high for Kernel.
Kernel is considering assets of Mriya agroholding among potential deals.
As for the possible placement of bonds, Verevsky said that the preliminary issue is $300 million. It could be expanded to $500 million. The company seeks to refinance current banking credits.
“The goal of the deal is to refinance bank credits and extend the term of paying on liabilities. Now we have renewable credit lines for three years. We would like to have the longer term,” he said.
If the above-mentioned plans are implemented, total investment in coming three years will be near $470 million, taking into account planned investment of some $120 million in Illichivsk seaport. If the company requires additional funds to expand working capital, it is able to finance it thanks to credit lines and operating flow, Verevsky said.
As reported, last week Kernel announced a roadshow for investors in the United States and Europe regarding a possible issue of eurobonds.
The eurobonds are to be issued in accordance with the 144A and Reg S rules, i.e. they will be available to U.S. investors with a maturity of five years and a fixed coupon rate.
Other details of the securities are not reported.
