UkrAgroConsult continues tracking stock performance of major Ukrainian Agro Holdings. We have noted a major slump in capitalization during yesterday’s trading session with Agroton losing another 68.56% of its capitalization, bringing it down from EUR 42.8 M just 4 days ago, on April 11^th, 2013 to EUR 5.97 M today, April 16, 2013. It is most likely that company’s inability to pay its debt holders caused major panic, to the extent that company’s shares were traded most actively for the past 3 years, diving share price down to PLN 1.13 per share (compared to PLN 8.14 4 days ago and PLN 3.60 just yesterday). Cyprus government freezing bank accounts, where company apparently kept its significant amount (70%) of its cash and lack of risk diversification techniques utilized led to the situation company is facing at the moment.

AgroInvest comment: We are most certain that current situation will have direct effect on ability of Ukrainian companies to attract foreign funds for financing their plans for at least next 2-3 months. Depending on how this situation is resolved, 2013 might become yet another year when only top-10 most reliable holdings are able to source external funding.

UkrAgroConsult