Through a private stock placement, a Ukrainian agro-holding has raised $43 million to buy equipment and lease additional land
Ukrainian agro-holding Land West raised $43 million last week through a private stock placement on the Frankfurt Stock Exchange, making it the second domestic group hoping to cash in on a strategy largely based on long-term leases of prized agricultural land.
Nick Piazza, corporate relations director at Concorde Capital, the Kyiv-based investment bank that acted as financial advisor for the placement, said European investors snapped up a 20 percent stake in Land West, valuing its market capitalization at $215 million. The shares were issued on Dec. 13 in the form of GDRs by Kremney Public Company, Land West’s holding.
Piazza said the placement was “oversubscribed,” adding that Land West would use the funds raised to buy equipment and lease additional land, doubling its portfolio to 300,000 hectares. A future IPO on the London Stock Exchange’s AIM is planned, he said.
Plans envision that leased land will be used to harvest bio-fuel, feed and food crops.
Last month, Landkom, a company with a similar strategy, raised $111 million through an IPO on the AIM.
Leading Ukrainian sunflower oil producer Kernel Group raised $220 million by floating a minority stake on the Warsaw Stock Exchange earlier this year.
Piazza said investors are increasingly seeking returns from high growth opportunities in Ukraine’s potentially huge agricultural sector, having earlier focused heavily on equity investments in metallurgy and banking.
Blessed with one of the richest soils in the world and good climate conditions, “land [investments] might be the next big thing for Ukraine,” Piazza added.
