Mriya Farming PLC (UK) and SALIC UK Ltd (Saudi Agricultural and Livestock Investment Company, United Kingdom) today announced that they have entered into a share purchase agreement for the sale to SALIC of the Mriya group`s Ukrainian farming assets, including infrastructure facilities, machinery, and companies owning land lease agreements. The value and terms of the transaction have not been disclosed.
Completion of the transaction is subject to approval from the Antimonopoly Committee of Ukraine (AMCU) and other customary closing conditions. Upon completion of the deal, Mriya will continue its operations in Ukraine alongside SALIC's subsidiary, Continental Farmers Group (CFG). The advisors to Mriya in the sale transaction (and to Mriya's creditors in the recent restructuring of Mriya) were Rothschild & Co, in collaboration with ICU and Finpoint as local partners and Hogan Lovells International LLP.
"After Mriya`s default its creditors became business owners and supported the company for three years, providing it with essential working capital. In doing so, they saved Mriya from bankruptcy, restructured 1.1 billion dollars of legacy debt, and retained the company's jobs and operations,"- said Giovanni Salvetti, Managing Director of Rothschild& Co. - "But the creditors became Mriya`s shareholders by circumstance and are not agricultural business operators. They understand that for the further development of the company a strategic investor is needed, with expertise and sufficient resources to bring Mriya to the next level."
Khaled Alaboodi, Chairman of SALIC UK, commented: "Our subsidiary, CFG, has successfully operated in Ukraine since 2006, farming 45,000 hectares in L’viv and Ternopil regions. It has focused strongly on its social responsibilities working closely with regional and local administrations and invested heavily in infrastructure, equipment, people and the care of the land. Considering the positive experience of investing in the Ukrainian economy, SALIC UK decided to expand the business and thoroughly studied the Ukrainian agricultural market in search of new opportunities. Mriya`s creditors, having successfully restored the business after default, have been looking to handover Mriya to a strong and reliable strategic investor that is focused on operating agricultural assets and investing further in the future of Ukraine. Both parties’ interests converged into the deal signed today, which aims to continue the successful development of profitable farming operations in Ukraine. Key to the ethos of SALIC UK is identifying, acquiring and operating long term, profitable and sustainable agribusiness investments. Agriculture is a long-term business and is suited to Investors with a long-term perspective. Today’s acquisition of Mriya fits very well into SALIC UK’s investment criteria and much needed post acquisition investment will secure the long-term profitability of this excellent asset.”
Mark Laird, CEO of CFG, added: “Over the next 2 years, we plan to significantly invest into new equipment, infrastructure, agricultural technology and land bank consolidation as well as work closely with the local management to build the combined Mriya and CFG operations into a World Class farming operation.”
Simon Cherniavsky, CEO of Mriya says that the entry of a global strategic investor focused on agriculture is an ideal solution for Mriya`s future. “Our new shareholder is going to invest in the company’s successful development, providing proven expertise and the highest standards of corporate governance. At the same time this transaction allows Mriya to provide a stable and long-term future for employees and honor all of its obligations to partners, land owners, and local communities", - he commented.
Oleksiy Pavlenko, Minister of Agrarian Policy and Food of Ukraine 2014-2016 and Chairman of the board of directors of Mriya Farming PLC said: "Mriya is an unprecedented case both for Ukraine and Eastern Europe. Creditors and management succeeded not only in restoring the company’s operations after default, but also completed this unprecedented billion-dollar debt restructuring, making Mriya an attractive investment. Ukraine’s institutions also demonstrated their ability to protect the rights of foreign investors. Today's deal confirms this – SALIC UK's investment in Mriya is one of the largest investments in Ukrainian agriculture and the economy of Ukraine as a whole over the past few years. Current transaction gives strong positive signal and will have significant positive effect on investment interest to the whole agrarian sector of Ukraine".
SALIC UK (Saudi Agricultural and Livestock Investment Company, United Kingdom) was established as a wholly owned subsidiary of the Saudi Agricultural and Livestock Investment Company which is a joint stock company that is owned by the Public Investment Fund of the Kingdom of Saudi Arabia. Its statutes state that its activity is in the field of investments in agricultural and livestock production in countries that have a competitive advantage in contributing to the production of selected food goods and their availability for export markets. The SALIC UK strategy focuses on twelve product categories: wheat, barley, corn, soybean, rice, sugar, vegetable oils, green fodder, red meat, milk products, poultry and aquaculture.
As a specialist in the field of investment in agriculture and livestock production and supply, SALIC UK aims to engage in the full supply chain for selected agricultural and livestock goods worldwide. SALIC UK investment focus extends to investments in supply, storage and handling, so that greater efficiency can be developed in delivery systems and security of supplies for all potential customers.
Mriya Farming plc is the English parent company for one of the largest Ukrainian agricultural groups, farming 150 thousand hectares in six regions of Western Ukraine: Ternopil, Khmelnitsky, Chernivtsi, Ivano-Frankivsk, L’viv and Rivne. The Mriya group operates 4 modern silos with a total capacity of 380,000 tons, a potato storage facility with a total capacity of 52,000 tons, a seed plant and a potato starch plant.
The group specializes in growing wheat, rapeseed, barley, sunflower, soybean, corn, sugar beet, potatoes and other crops.
In August 2014, the former parent company of the Mriya group defaulted on its total debt of US 1.1 billion. Since February 2015, the creditors - mainly European and American investors - have taken control over the Mriya group's assets and restructured its operations. On August 21, 2018 creditors and management of the Mriya group, with the strong support of Rothschild & Co, in collaboration with ICU and Finpoint as local partners and Hogan Lovells International LLP, successfully completed the legacy debt restructuring and lifted the group out of default.
