The EBRD is lending Yug Rusi, the largest edible oil producer in Russia, €146.5mn to help the company modernise its plant and develop a capital expenditure programme, provide working capital, and help restructure its balance sheet by refinancing existing debt.
The loan will help Yug Rusi implement a new strategy which includes identifying new sources for raw materials, increasing supplies and expanding geographically. It also supports local farmers, and will increase efficiency and productivity by developing the company’s own packaging facilities.
The loan has an A/B structure, with the B loan, comprising 50% of the overall financing, fully underwritten by ABN Amro and to be syndicated to other commercial banks in the coming weeks.
Gilles Mettetal, EBRD director for agribusiness, said the bank’s loan will help Yug Rusi become even more competitive – both domestically and internationally – in the growing Russian edible oil market.
The loan will also help boost the local economy, and support local farmers by acquiring their raw materials. A large facility to a local Russian client, facilitating development of key agricultural region fits very well within the EBRD’s agribusiness strategy and is a good example of what the bank is trying to achieve in Russia, he adds.
Established in 1993 as a grain trader and flower mills operator, Yug Rusi has expanded to a vertically integrated agro-industrial group including edible oil plants, grain terminal, silos, bakeries and over 20 agricultural farms. Today the company, which employs over 10,000 people, is one of the largest Russian sunflower oil producers, grain traders and the leader in the Russian bottled edible oil market.
Anushavan Simonyan, ABN Amro’s global head of structured commodity finance, says that the innovative structure of the facility, in which a number of classical commodity finance elements are combined with the more usual structure of EBRD facilities, should strongly support the interest of the market in the B loan, which carries a five-year tenor. ABN’s relationship with Yug Rusi dates from many years ago and the bank has closely been involved with the company’s impressive growth and development during that time.
Vladimir Badakh, general director of Yug Rusi Managing Company, says Yug Rusi plans to modernise agricultural production in the region which, while benefiting local farmers, will help the company’s strategy to develop further.
Yug Rusi will also produce sunflower oil certified according to the international ‘bio “standard, providing maximum ecological benefits. By producing more high-quality and ecologically clean sunflower oil, Yug Rusi can satisfy additional demand from Russian and international markets in Europe, Asia, and Africa, says Badakh. The cooperation with the EBRD and ABN is an important element that will support Yug Rusi’s development, he adds.