August 2, 2006

Russian pork processor receives loan

Russian integrated meat processing giant, the Cherkizovo Group, would receive a 1.7 billion-ruble (US$63.5 million) loan from the Russian Gazprombank for the group's subsidiary Lipetskmyasoprom to build the second stage project of a pig farm in the Lipetsk region.

According to the Tass news agency, the farm is expected to produce 50,000 tonnes of pork a year and it has already attracted a loan from the Gazprombank of nearly 1.5 billion rubles (US$56 million) for the first stage of the project.

The Cherkizovo Group is also building another pig farm in the Tambov region which would have about half the output of the Lipetsk farm.

Cherkizovo Group floated on the London Stock Exchange a month ago and raised two-billion rubles (US$74.8 million) through the issue of two-million bonds.

Sergei Mikhailov, the CEO of Cherkizovo Group, said the successful bond issue indicated the strong investor interest in Cherkizovo Group and affirmed the prospects of the animal husbandry sector.

Proceeds would optimise the company's debt structure, Mikhailov said.