Nasdaq OMX First North-quoted Alpcot Agro has launched an agreed bid for Ukrainian agricultural commodities producer Landkom International.
Shareholders receive one Alpcot share for every 22.16 Landkom shares they own. Alpcot shares had closed at SEK6.25 (58.2p) a share on 19 December, which values Landkom at £11.4m (2.62p a share). The shares had closed the dayís trading at 3.12p each, which valued the company at £13.6m.
Landkom raised £54m at 52p a share when it joined Aim in November 2007. The financial crisis in 2008 meant that Landkom could not expand as originally planned. It is not in a strong position because cash flow is weak despite relatively good harvests. Tractors are not up to the job and require replacing.
Both companies trade at significant discounts to their NAVs and they are also losing money. Landkom shareholders will own 16.4% of the enlarged group and option holders a further 0.6%. Alpcot will also raise a minimum of $20m from a placing, which will help to pay off Landkomís creditors and borrowings. Landkom had $24.1m of short-term liabilities at the end of September 2011, including $14.1m owed to agri-supplier Amako.
Alpcot plans to list on the Main Market of NASDAQ OMX Stockholm by the summer of 2012. It has been quoted on the First North market since 19 October 2009.
Alpcot controls approximately 181,400 hectares of agricultural land in Russia and 18,800 hectares in Ukraine. Landkom controls 79,230 hectares and 64% of that was harvested last year. Rapeseed, wheat, maize, soya bean and barley have been produced. Alpcot has a similar crop mix and its yields are better and costs are lower.
Alpcot Agro was set up by Alpcot Capital Management, which owns 13.5% of Baltic Oil Terminals and 9.65% of Urals Energy.
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