Within frames of the potential transactions for assets purchasing, announced in March 30, 2011, Kernel Holding S.A. purchased 100% of stocks of the company Russkie masla, producer of sunflower oil in Russia.

As the press service of Kernel declared on August 15, the value of the acquired company is estimated at the level of 60 mln USD, with payment in cash of 15 mln USD

The parties signed a sale agreement and, the Antimonopoly Committee of the Russian Federation already approved the transaction. For the final closing of the transaction, expected in early September, the parties have to execute a number of conditions, informed the announcement.

The general additional capacities of three plants to be purchased within frames of the transaction, total 400 thsd tonnes of sunflower seeds per year. One production site is located in Krasnodar Krai, the other two - in Stavropol Krai in southern Russia. The capacities for refining and bottling of the company Russkie masla total 100 thsd tonnes of oil per year.

Kernel expects that during 2012 fiscal year the purchase will provide additional earnings before interest depriciation tax amortization (EBITDA) of 20 mln USD.

The purchase is relatively small-scale for Kernel, but it provides an opportunity to begin operating on the Russian market, relying on the good forecast of sunflower harvest in 2011. Moreover, in the long term prospect the transaction allows to Kernel to geographically diversify its activities and receive benefits from high yields of sunflower in Russia, which is the world second largest producer and third largest exporter of sunflower oil. The purchase – the first for Kernel abroad - will expand activities of the company in Russia, based on the business model successfully developed in Ukraine, said Andrew Verevskiy, Chairman of the Board of Directors of Kernel Holding S.A.

AgrimarketInfo