Friday, April 1, 2011

Farmland: "Investors pump $400m into Ukraine farming groups"; Soros-Backed Adecoagro Trades solidly Above IPO Price Despite Loss (AGRO)

Regarding farmland as an investment here's something I was thinking back in February:
...We've been following this trend for the last three years and have been asked when will it top?
One sign will be when Optima Fund Management brings their American Farmland Company public, still a few years away....
First up, Agrimoney:
Investors have backed hopes for Ukraine agriculture with a near-$400m cash injection, pouring $140m into an acquisition warchest raised by Kernel Holding, and $250m to support expansion plans at farm operator Mriya Agro.
Kernel, the silos-to-sunflowers group which yesterday announced the issue of about 5m new shares to bankroll ambitious takeover plans, said that it had in fact sold 5.4m shares, raising 399.4m zloty ($140m).
The placement price of 74 zloty per share represented a 1 zloty discount to Wednesday's closing price.
However, it was significantly above levels as low as 68 zloty to which the shares fell after the stock issue was announced.
The shares, which are traded in Warsaw, rebounded 5.3% to 74.75 zloty in morning trade on Friday.
'Aggressive expansion'
The announcement came as Mriya Agro, an unlisted group which farms more than 200,000 hectares in Ukraine, revealed the closure of its first issue of eurobonds, for $250m, which has been in train since last year...MORE
And from RTT News this morning:
Adecoagro FY10 Loss Widens 
If the name seems vaguely familiar it may be because you saw this in late January:

Soros-Backed Adecoagro Raises $314 Million in IPO

Adecoagro SA, the South American farmland venture backed by billionaire investor George Soros, raised $314 million from its U.S. initial public offering after pricing the shares at the bottom of the range.
The Luxembourg-based company sold 28.57 million shares at $11 apiece, after earlier today cutting the range to between $11 and $12, according to Bloomberg data. That’s down from a previous plan to sell the shares at as much as $15 each.

The initial offering comes as commodity prices rally and food prices reach record highs. Adecoagro produces sugar, coffee, soybeans, corn, rice and milk in farms in Brazil, Argentina and Uruguay. Proceeds will be used to build a sugar and ethanol processing plant in Brazil and to buy farmland.

Adecoagro added 9.1 percent to close at $12.00 in New York Stock Exchange composite trading.
“The problem with Adecoagro is that it is a new company, people are not familiar with it and, as a consequence, I think the initial price range was quite high,” Kristof Bulkai, a fund manager at Thames River Capital LLP in London said today in a telephone interview. He plans to buy a “large stake.”

Adecoagro’s shareholders include Pampas Humedas LLC, an affiliate of Soros Fund Management LLC, which owns about 33 percent and plans to reduce its stake in the company to about 21 percent after the offering, according to the filing....MORE 
AGRO is trading down a penny at $13.47 and up 22% in two months.