Prodo to Purchase Two Plants from Polivtsev

RUSSIAN FEDERATION - Prodo Group has offered Denis Polivtsev 150 million rubles to purchase the Sylvenskaya and Yayvinskaya poultry plants.
calendar icon 21 October 2008
clock icon 3 minute read

Prodo Group and Denis Polivtsev, the owner of Sylvenskaya and Yayvinskaya poultry plants, have started negotiations on sale of these two plants to Prodo. The discussed price for both assets is 150 million rubles (RUB). This amount may help the businessman to settle up with his creditors. Denis Polivtsev confirmed the fact of negotiations with Prodo but declined to comment further, reports MeatRussia.

Sylvenskaya (in Perm district) and Yayvinskaya (in Aleksandrovsky district) belong to the holding, Broiler Group, of Denis Polivtsev. According to the owner, in 2006 sales value from Yayvinskaya and Sylvenskaya amounted to RUB250 million and RUB400 million, respectively. However, in the second half of 2007, both poultry plants were closed, and now their owner is reported to have run into difficulties with repayments to Sberbank (Savings Bank of Russia), Ural FD and Econatsbank. The debts to the latter two banks are said to amount to RUB40 and RUB50 million, respectively.

Prodo Group, in its turn, is the main claimant for the poultry production assets of Mr Polivtsev. Sylvenskaya is located at the same industrial site as Permskaya. Permskaya is part of Prodo Group and is the largest poultry plant in this territory. Previously, Mr Polivtsev offered Prodo his poultry plants for RUB600 million.

A source at Prodo confirmed the group's interest in purchasing Sylvenskaya. In 2007, Permskaya produced 22,500 tons of chicken meat, and the holding plans to increase production volume up to 55,000 tons by 2011. Prodo considers the Sylvenskaya plant as an additional site for further development of their production. The background to the purchase of the Yayvinskaya plant is similar.

Meanwhile, the parties will have to discuss the price of the plants in future. MeatRussia reports that, according to Kommersant, Prodo is not yet ready to acquire the plants for RUB150 million. This is based on the cost of investment required to reconstruct the production facilities, which may amount to dozens of million rubles. Today, when the market faces the liquidity crisis, it hardly worth purchasing the plants for RUB150 million, the publication says, although the price was reasonable two years ago, commented Oleg Starodubtsev, the General Director of financial group, PM-Invest. He added that he expects Prodo to purchase the assets of Denis Polivtsev, but at a lower price.

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