Rusagro founder Moshkovich selling 13.4% of company in SPO

MOSCOW. Sept 29 (Interfax) - Granada Capital CY, a company controlled by Rusagro Group founder and chairman Vadim Moshkovich, is selling about 18 million GDRs representing a 13.4% stake in the Russian agribusiness group in a secondary public offering.

Following the completion of the offering, Granada's stake in Rusagro will drop to 58.5%, Rusagro said in a statement on Tuesday.

J.P. Morgan, UBS and VTB Capital are acting as joint global coordinators and joint bookrunners. Bank GBP International S.A. is acting as Joint bookrunner.

The SPO will be a fully-marketed offering, as opposed to an accelerated bookbuild, so potential investors will have a chance to look over the memorandum and ask questions in a series of meetings with the company, and the order book will be built over a longer period.

The company is tentatively indicating to investors that the bookbuild will conclude on Thursday, September 30, a source familiar with the deal told Interfax. The price range has not been conveyed to the market yet.

Rusagro's closing price on the London Stock Exchange was $15.22, so the whole offered stake has a market value of about $275 million, before the usual discount given in an SPO.

Moshkovich and Rusagro CEO Maxim Basov have agreed to a 180-day lock-up with respect to their shares in the company after the SPO.

"Mr Moshkovich reiterates his strong belief in the Company's prospects and his confidence in the Company's management team to continue delivering impressive results as they did this during the last year, achieving the highest adjusted EBITDA in the Company's history. He believes the Company's strategy has the potential to create further shareholder value for the public minority investors and his significant remaining holding. Moreover, the Offering would increase the free float of the Company, which provides an opportunity to enhance trading liquidity for the benefit of the shareholders," Rusagro said.

Moshkovich will continue to serve as chairman of the company's board and will remain Rusagro's largest shareholder, and "has no intention to reduce his shareholding in any substantial way," the company said.

Earlier this year, Basov said that Rusagro was not planning to sell new shares in order to raise financing for the company, but that questions regarding the prospects of an SPO in order to increase liquidity should be addressed to the principal shareholder. In September, he also said that he did not plan to sell his stake.

Earlier on Tuesday, Rusagro investor relations and sustainable development director Svetlana Kuznetsova, asked about the possibility of a share buyback, said that on the contrary the company is interested in increasing liquidity.

Rusagro Group's (Ros Agro plc) charter capital is split into about 27.333 million shares and five GDRs represent one share. The company is listed on the LSE and Moscow Exchange .

The Moshkovich family is the group's principal shareholder with 71.8%. Basov holds a 7.5% stake, and the free float is 20.6% (not including about 2.135 million treasury GDRs).

Rusagro raised $330 million in an IPO on the LSE in 2011, and carried out an SPO that raised $250 million in 2016.

Rusagro Group is a major producer of sugar, pork, sunflower oil, mayonnaise and margarine. The group's revenue grew 15% to 159 billion rubles in 2020 and EBITDA jumped 65% to a record 32 billion rubles. The EBITDA margin rose to 20 from 14% in 2019.

Basov said repeatedly that he saw potential to improve performance in 2021, despite the previous year's record and government regulation of prices for and exports of agricultural products.

Rusagro's EBITDA surged 86% to 22.1 billion rubles in the first half of 2021 on revenue up 45% to 104.4 billion rubles, and the EBITDA margin rose to 21% from 16% a year earlier. Net profit jumped 81% to 17.6 billion rubles.

The growth of Rusagro's results was driven in part by rising prices for staple crops and food products, analysts said.