Share sales to benefit managers

VILNIUS - The Lithuania-based and Nasdaq traded agriculture company Linas Agro Group’s board has made the decision to sell 5.34 percent shares of the recently acquired producer and trader of fertilizers, CJ-SC Ukragro NPK, to the latter company’s management, reports news agency LETA. The shares are planned to be acquired by the top managers by the end of this year. After the transaction is completed, Linas Agro Group will control 58.04 percent of the company’s shares.

A similar decision - to sell 4.66 percent of CJ-SC Ukragro NPK shares to the company’s managers: three natural persons of the Republic of Lithuania - was also made by the Denmark-registered Akola ApS board, the other shareholder of CJ-SC Ukragro NPK. After the transaction Linas Agro Group will run 58.04 percent of CJ-SC Ukragro NPK shares, while Akola ApS, which is also the largest shareholder of Linas Agro Group, will have 31.96 percent of the shares. The managers will own ten percent of the company’s stock.

“Since the management of CJ-SC Ukragro NPK decided to acquire a part of the company’s shares, we have considered all the aspects of such a step. The conclusion was drawn that the decision to sell a part of the company’s shares to the managers would be the best solution considering their interests, the interests of the company and us, the controlling company. All the managers have been working in the company since its founding in 2002, and their wish is a mature decision to bond themselves with the company in the future, too. We expect that as the new shareholders, the company’s managers, who have already proven their competence under various market circumstances, will put even more effort into the growth of the company’s value as well as the value of the entire Linas Agro Group,” Linas Agro Group board member and Linas Agro Project Director Arunas Jarmolavicius says.

The Kiev-based public limited liability company CJ-SC Ukragro NPK is a fertilizers production and trading company, owning a network of 13 fertilizer distribution warehouses and selling nitrogen, potassium, phosphorus and complex fertilizers as well as producing blended NPK fertilizers. The company trades fertilizers both of its own production and those imported from Russia, Belarus, Germany, Belgium, Israel and Poland.

In 2009, the company sold 152,000 tons of fertilizers while in the nine months of 2010, Ukragro NPK has already traded 205,000 tons, thus, it has already exceeded the planned annual amount of 200,000 tons. According to the corrected forecasts of the company’s activities, CJ-SC Ukragro NPK is expected to sell 230,000 tons of fertilizers and reach a turnover of 226 million litas (65.5 million euros) as well as EBITDA of 8 million litas in 2010. The company plans to expand the range of both sold fertilizers and offered services and open 1-2 new distributional warehouses every year.
Founded in Kiev, the capital city of the Ukraine, in 2002, the company is engaged in wholesale and retail trade of fertilizers and production of blended NPK fertilizers. The company has 183 employees.

Thirteen fertilizer distribution warehouses run by CJ-SC Ukragro NPK are located in the most important agricultural regions of Ukraine, and in total can store about 50,000 tons of fertilizers. Three of them (west, central and east Ukraine) have blended NPK fertilizer production units.

Linas Agro Group, as the company characterizes itself, is an integrated agribusiness company engaged in international agricultural business, production and trade in agricultural produce and raw materials. It controls companies in Lithuania, Latvia and Denmark. As of Feb. 17, 2010, Linas Agro Group is listed on NASDAQ OMX Vilnius stock exchange.