EkoNiva responded to the offer of Rusagro Group to buy the company

This is how he commented on the words of Maxim Basov, CEO of Rusagro Group, who on August 16 said that the group was ready to consider buying EkoNiva if there was an offer.

According to the representative of EkoNiva, the group also ‘does not see any need to sell any existing assets, although in any case it never comments on such business negotiations.’

EkoNiva Group completed the main phase of its investment program in 2020, he reminded.

‘This allowed us to increase the production of raw milk five times compared to 2015 and become the undisputed leader among not only Russian but also European producers, as well as number three in the world,’ he stressed. ‘In Russia, EkoNiva accounts for about 6% of the production of commercial milk. According to the results of the four quarters ended on June 30, 2021, the group's companies produced more than 1 million tons of milk. According to the results of the calendar year 2021, production will exceed 1.1 million tons. The average yield per forage-fed cow on EkoNiva farms is about 29 kg per day compared to the national average of 20 kg.’

The company said that the cash flows from the 40 modern livestock complexes built would grow, which means that it will be able to fulfill all its obligations.

According to the results of the first half of 2021, the group's revenue in rubles increased by 32%, to 21 billion rubles, EBITDA - by 14%, to 11.6 billion rubles. At the same time, the liquidity in rubles increased by 43%.

At the end of 2020, the group's net financial debt was about 1.2 billion euros, most of which were long-term liabilities. ‘To a large extent, the high debt burden is due to the investment activity of the group in recent years and the peculiarities of the dairy farming, in which EkoNiva specializes,’ said the company's representative. ‘This is the most capital - intensive and long-term branch of agriculture in terms of payback - even with state support you should expect a return on investment in at least 10 years. At the same time, the company's debt-to-EBITDA ratio remains high, but it is declining, ahead of the planned schedule.’

EkoNiva is the largest producer of raw milk in Russia. It manages farms with more than 200 thousand cattle with the production of more than 3 thousand tons of raw milk per day. The plants are located in Voronezh, Kaluga and Novosibirsk regions, the land bank is over 630 thousand hectares. By the end of 2020, revenue increased by 15% to 464 million euros, EBITDA increased by 13% to 189 million euros.

As reported, the company is currently negotiating with the main lender - Rosselkhozbank, as well as with Sberbank on medium-and long-term financing of the group. At the same time, it did not rule out that it could temporarily transfer control over its operating companies in Russia to Rosselkhozbank.