Akola group
Notification on material event

AB Linas Agro Group to sell shares of the Ukrainian company with plans to strengthen its position in the Baltic region

Panevezys, Lithuania, 2012-02-06 08:00 CET -- AB Linas Agro Group sells 58.04% of shares of the Ukrainian fertilizer production and trade company PJ-SC UKRAGRO NPK worth approx. LTL 90.5 million to international chemical group OSTCHEM.

“Having acquired 50% of shares of PJ-SC UKRAGRO NPK in 2010 we planned the expansion of the company. The expansion plans have actually been implemented with fertilizer sales reaching approx. 200 thousand tons up to date in economic year 2011-2012 started 1 July 2011. Similar results may be expected in the future with yearly EBITDA of approx. LTL 10-11 million. However, further development of the company is not possible without sizable investment. Production capacity has to be increased in order to enlarge the existing share on Ukrainian fertilizer market, which requires the investment of hundreds of millions LTL in construction of big capacity plant. Having estimated the amount of investment and all types of risk the company came to a decision to review its expansion plans. Strategic investor has taken an interest in the company at the same time. The chemical group investing in Eastern Europe has capacity and funds to expand the activities of the company. The proposal of strategic investor was good enough to encourage all shareholders to sell their shares. We will use the income obtained from sales of shares in further business development in the Baltic States and Poland – expansion of grain and fertilizer storage network and expansion of agricultural production. Several development projects and acquisitions are currently being discussed at the company,” commented Managing Director of AB Linas Agro Group Darius Zubas.

PJ-SC UKRAGRO NPK was established in 2002 in Kiev, the capital of Ukraine. The company produces NPK fertilizer blends and executes wholesale and retail trade of various fertilizers, possesses fifteen fertilizer distribution warehouses. Fertilizer blends are produced in fertilizer blend units in Western, Central and Eastern Ukraine. 183 people are employed by the company.

The management of the Group expects that selling of PJ-SC UKRAGRO NPK will not affect other Ukrainian activities of the Group, i. e. exports of grains and feedstuffs from Ukraine. Investment in expansion in the Baltic Sea region is expected to increase the company’s EBITDA by approx. LTL 15 million.

About AB Linas Agro Group

AB Linas Agro Group is an agribusiness parent company engaged in the production and trade of grains, oilseeds, feedstuff and agricultural inputs. It controls companies in Lithuania, Latvia, Estonia, Denmark and Ukraine. The group consists of international trading company in Lithuania AB Linas Agro, grain storage company UAB Linas Agro Grūdų centras KŪB (controlling grain storages in Joniškis, Kėdainiai, Kupiškis, Pasvalys, Šakiai district, Šiauliai and Vilkaviškis), Latvian trading company SIA Linas Agro, international trading company Linas Agro A/S in Denmark, Ukrainian based fertilizer production and trade company PJ-SC UKRAGRO NPK, group of companies ŽŪB Landvesta, managing agricultural land, group of five agricultural companies UAB Linas Agro Konsultacijos, operator of lignin biofuel accumulation UAB Lignineko and other companies. The financial year of the companies begins on 1 July.

Together with partners, the controlling company owns agriculture-related products and services providing company UAB Dotnuvos projektai and logistics company UAB Jungtinė ekspedicija.

From 17 February 2010 AB Linas Agro Group is included in the main list of companies of NASDAQ OMX Vilnius stock exchange.

         More information:
         
         Arūnas Jarmolavičius
         Project Director of AB Linas Agro
         Board Member of AB Linas Agro Group
         Phone +370 698 27 855
         E-mail a.jarmolavicius@linasagro.lt