Trigon Agri A/S announces the disposal of a non-core part of its elevator business
Trigon Agri A/S (also the “Company”) announces that it has executed today the share purchase agreement for the sale of the Ukrainian subsidiary of Trigon Agri A/S – LLC “Liudmylivskyi Elevator” with the useable storage capacity of 78,000 tonnes, located in Nikolaev region (also the “Elevator”) for a total cash consideration of USD 1,195,482. The total cash consideration is comprised of the nominal purchase price of USD 1,150,000 and the upward adjustment of USD 45,482 (as a payment for fuel residues, materials and spare parts, cash on account and accounts receivables).
According to the conditions of the transaction, the amount in UAH equivalent to USD 1,145,482 has been credited to the bank account of the Ukrainian parent entity of the Elevator in Ukraine today. The remaining part of the purchase price in the amount of USD 50,000 will be received by the Company not later than 3rd May 2017 after the balance of the third parties’ stock would be entirely offloaded from the Elevator. The USD 50,000 amount can be only reduced by any possible shortfalls in the quantity of the stored grains warranted by the Company to the buyer on the date of the transaction.
The divestment of the Elevator comes in the midst of ongoing optimization of the Trigon Agri A/S business operations in Ukraine. Historically, the storage operations of the Elevator have been inefficient which resulted in mainly poor financial performance. Due to the absence of the land bank of the Company in the vicinity of the Elevator, the quantity of the Company’s own produce stored in the Elevator is non-existent. Furthermore, due to the close proximity of the Elevator to the sea grain transhipment terminals, the neighbouring farmers opt to deliver crops directly to the sea grains terminals rather than deliver crops for storage to the Elevator.
The proceeds from sale of the Elevator shall constitute USD 1,195,482 (approximately EUR 1,130,693) less a transactional commission fee in the amount of EUR 48,945. The closing net assets of the Elevator on the date of the transaction recorded at EUR 406,180. The preliminary estimated effect from the transaction is a profit of EUR 675,568 (subject to future FX differences) to be accounted for in 1Q 2017 financial interim report .The profit can be downwards adjusted by possible deductions from the remaining purchase price of USD 50,000 following the results of the offloading of the Elevator.
Comment for the CEO
Simon Boughton, the CEO of Trigon Agri A/S, commented on the transaction as follows:
“Liudmylivskyi Elevator has been non-core for several years now, in that the Company does not farm on adjacent lands to the site and has not required storage space for its own crops in this region. The divestment of the Elevator is part of our ongoing restructuring process and it releases up to USD 1,143,732 in total (approximately EUR 1,081,748) of capital from a weakly performing business, as we seek to enhance our core business that is profitable agricultural production”.
Investor enquiries
Mr. Simon Boughton, CEO of Trigon Agri A/S
Tel: +372 6191 500, E-mail: mail@trigonagri.com
About Trigon Agri A/S
Trigon Agri A/S is an integrated soft commodities production, storage and trading company with operations in Ukraine, Russia and Estonia. Trigon Agri A/S shares are traded on the main market of Nasdaq Stockholm.
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