Monday, April 25, 2016

Sanctions Working Out Okay For Russia's Billionaire Farmers

From Bloomberg: 

Billionaire Farmers Reap Fortunes From Russia Food Sanctions
  • Ros Agro's plan for sale of London stock shows farmers benefit
  • First Russian offer in city since October is part of expansion
Russia’s geopolitical conflicts, anemic oil prices and weakened ruble are working out rather well for the country’s biggest publicly traded farming company.

Ros Agro Plc has ambitious plans to build pig farms and greenhouses in central and eastern Russia, as well as for acquisitions, by selling U.K.-listed shares.

Its aim for the first Russian offering of new stock in London since October illustrates a wider renaissance for the nation’s farms as billionaires from Vladimir Evtushenkov to Gennady Timchenko, friend of President Vladimir Putin, invest in tomatoes and apple trees. It also marks the curious consequences of Russia’s worst falling out with the U.S. since the Cold War.

Ros Agro, owned by Vadim Moshkovich, another billionaire, will raise $250 million to fund investments and help fill a void left by falling food imports after tit-for-tat trade sanctions between Russia and western nations, and a weak ruble that raises prices of shipments from overseas.

“The company is going to invest aggressively and grow,” said Svyatoslav Arsenov, who helps oversee about $300 million including a Ros Agro stake at UralSib Asset Management in Moscow. “The devaluation of the ruble has made the sector very attractive from the perspective of money generation.”
Russia, the world’s ninth-biggest food importer in 2013, had cut its overseas purchases almost 40 percent to $26.5 billion by 2015, according to government data. Putin has urged a drive to increase food security, saying last year that Russia’s huge tracts of farmland “make us the richest country” in agriculture....MORE