October 30, 2019, 19:57 / Business

VEB.RF will sell Eurodon at a discount

The Supervisory Board of VEB .RF decided to sell the Eurodon Group of Companies, once the largest turkey producer in Russia, at a discount to a strategic investor, TASS reported , citing the head of the state corporation Igor Shuvalov. “The decision of the supervisory board is to sell at a discount to the nominal price of the debt. So we believe that, although at a loss for VEB, but with a good financial result, we will sell this asset and fulfill our development function, since this asset goes to a strategic investor,” Shuvalov added.

The profile investor is Rosselkhozbank .RF clarified , a representative of VEB ; the bank has competence in financing agriculture, he noted. Rosselkhozbank will already attract a specialized investor.

The supervisory board approved the sale of Eurodon to a pool of strategic investors, a person close to one of the parties to the deal told Vedomosti. Eurodon, taking into account the debt, will be sold for 6.2 billion rubles, while an international appraiser valued it at 4.2 billion rubles. RSHB acts as a lead manager in this transaction, who, as a result of a series of transactions, will ensure the sale of the asset to a pool of specialized investors.

Last week, the Kommersant newspaper reported that VEB was unable to find an investor for Eurodon and the asset will be transferred to Rosselkhozbank ( RSHB ). An agreement in principle on the purchase of Eurodon has been reached, the deal has not been completed, says a representative of the Russian Agricultural Bank . Now the details of the deal are under discussion, he said.

Shuvalov recalled that VEB held a tender, as a result of which companies were identified that wanted to buy this asset. Large companies were interested in the enterprise - Damate, Cherkizovo, GAP Resurs, a person close to Eurodon previously told Vedomosti. VEB .RF expected to earn 10 billion rubles for Eurodon. Eurodon's debt to VEB.RF is 30 billion rubles, Interfax reports with reference to Shuvalov. Several specialized investors are interested in the purchase, continues the RSHB representative . The bank will make a decision on choosing an investor “based on the need to restart production as soon as possible.”

The decision on who will be the buyer of Eurodon is now within the competence of Rosselkhozbank, says a representative of Cherkizovo. But the group remains interested in the asset, primarily the turkey business, he added. The Resource representative declined to comment, and the Damate representative did not answer questions. The Federal Antimonopoly Service has not received any requests to purchase Eurodon, a representative of the service said.

Eurodon was founded by Rostov businessman Vadim Vaneev. Eurodon's business was crippled by bird flu outbreaks in 2016–2017. and financial difficulties - production actually stopped, and control over the enterprise was gained by its main creditor - VEB.RF , which began to look for a new investor for the company.