Agrokultura has disposed of 9% of its assets in Russia
2013-12-27 14:56:33
According to the official statement made by the company on its official website, Agrokultura AB has agreed to sell its operations in Kaliningrad region, Russia with the purpose of increasing liquidity of the company.
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According to the data provided by the company, the total cash acquired from the sale is approximated at SEK 100 million, or USD 15.2 million. Loss of SEK 3 million is estimated and originates from the re-evaluation of assets, acquired in 2010. Total land bank of the cluster being sold is 14.3 thousand hectares of land, which comprises 9% of the company’s land bank in Russia. Total livestock sold is set at 1 200 heads.
Given the current state of investment climate in agrarian sector within the Black Sea Region, it is understandable that the company is seeking for additional cash flow to fund its activities. Company has already reported a SEK 110.4 million net loss for the 6 months ended June 2013, and given the results of other major holdings in the industry, we expect results for the 2nd half of 2013 to be worse that those reported for the first half. Therefore the sale of assets was a necessary, yet not the most beneficial move for the company.