Kernel sold 134k ha of agricultural land with infrastructure in Ukraine for USD 210 million
Kernel Holding has decided to sell some of its agricultural units in Ukraine, including 134,000 hectares of arable land with related agricultural infrastructure, machinery and working capital to reduce business risk and improve medium-term liquidity, the company said.
Uncertainty about the timing and possibility of resuming soft goods exports via Ukrainian Black Sea ports and the existing significant capacity constraints on alternative logistic export routes may translate into forced set aside of agricultural land in Ukraine in the future, significantly lowering the future financial results of agricultural activities, it was reported.
As a result, Kernel Holding entered into a legally binding share purchase agreement for the divested assets with an investment company (buyer) controlled directly by Andrij Verevski, a person discharging managerial responsibilities in the company as chairman of the board of directors. The compensation the buyer will pay to the company is USD 210 million, which is a significant premium compared to the company's current market capitalization over its consolidated net assets.
The transaction was approved by the company's board of directors, with all directors, including all three independent non-executive directors, voting in favor of the transaction, having given due consideration to the price offered for the divested assets by the buyer and the effect of the transaction on the company. The chairman of the board abstained on the grounds of the reported conflict of interest. Completion of the transaction depends on obtaining approvals from some of the company's creditors and meeting the relevant regulatory requirements, the company announced.
It was also added that the formal process of selling the assets held for sale, which had already begun, did not meet with much interest from local and international strategic players, given the current operating environment and unfavorable business prospects. Therefore, none of the potential bidders decided to submit a non-binding bid for the assets to be sold. Following due assessment, an investment company controlled directly by Verevski has agreed to act as a last resort investor to support the company in the present circumstances.
Kernel Holding is a food producer operating in Ukraine. It has been listed on the Warsaw Stock Exchange since 2007.
Source: Kernel Holding and ISBnews