After failing to find a buyer for the owner of more than 300 thousand hectares of farmland UK “Rostagro”, the Bank’s non-core assets trust decided to increase the efficiency of this business. This brought former top-the Manager “Rusagro” and “Agroterra” Yuriy Kostyuk, which should increase the value of the asset to be sold until 2023. But due to the current crisis, investors will be limited in funds, and the cost of land may decrease.That Yuriy Kostyuk became CEO of UK “Rostagro”, it became known from the register. “Rostagro” (until the end of 2017 was called “FosAgro”) — one of the largest owners of agricultural land in the country. According BEFL, the group manages approximately 326 hectares. the Main land Bank is concentrated in the Penza region, has a branch in Saratov. “Rostagro” previously associated with the group “Bin” (now Safmar), but her representative denied it. After the reorganization of the Bank in September 2017, principal owner of which was then Mikail Shishkhanov, the bad and the non-core assets of the Bank transferred to the Bank of non-core assets trust, which today owns and “Rostagro”. Yuriy Kostyuk in previous years was a top-Manager of group “Rusagro” Vadim Moshkovich and “Agroterra” (belongs to the American NCH Capital).According to the source “Kommersant” in the market, the main task of Mr. Kostiuk at the new location will output “Rostagro” on profitability. Consolidated financial statements of the group is not disclosed. According to “SPARK-Interfax”, at the end of 2018, the total loss associated with the “Rostagro” companies was at the level of RUB 5 billion In “Trust” told “Kommersant” that before Yuri Kostyuk tasked to improve efficiency and increase the margin of profitability per hectare through improved technology and cost optimization. He must also deal with the automation and optimization of business processes through the introduction of IT, as well as bringing all procedures in accordance with corporate standards of the Bank. Yury Kostyuk, declined to comment.Business optimization “Rostagro” could be required to attract investors. According to the source “Kommersant” in the market “trust” discussed the sale of assets with several potential buyers, but negotiations ended in nothing, as the parties do not agree on the price. According to the Director “Sovekon” Andrei Sizov of agricultural land in the Penza region on average cost about 22 thousand rubles per 1 ha. Thus, around 300 thousand hectares in the region is estimated at RUB 6.6 billion In “Trust” say that the dialogue with potential strategic investors is ongoing. Delivered before the new team “Rostagro” aimed at long-term growth of asset value and preparing for a potential sale, which could take place on the horizon until 2023, said the Bank.The Director of “Sovekon” Andrey Sizov noted that, if the “Rostagro”there are serious problems of a business’s profitability can be a non-trivial task for several years is not easy to handle: “In crop production impossible in principle to establish quickly, it is not the pipeline, and the effect of innovations can often be assessed only in the next season”. This may require addressing issues with logistics, storage, etc., while management may not be enough qualified personnel, especially senior and middle managers, he adds.To complicate the search for a buyer for “Rostagro” maybe the current situation. According to the Director of the Institute for agricultural market studies Dmitry Rylko, although in itself of agriculture crisis caused by the pandemic COVID-19, is not particularly affected, due to macroeconomic factors, the number of M&A transactions in the industry could be reduced, since the available funding for major acquisitions is likely to be less. In addition, the pandemic and the global decline in demand for agricultural products — a negative factor for the prices of agricultural land, adds Mr. Sizov. In Russia, according to him, the situation is exacerbated due to the regulation of the quota system, tracking, etc., which affects the profitability of the industry, the planning horizon which is at the level of 5-10 years and above.Anatoly Kostyriv
