December 23, 2010

Russia's Kursk poultry farm expects to raise US$3.26 million  

Krasnaya Polyana, which has been forced to cull over one million chickens after it could not afford to buy feed, is discussing with financial companies and banks to raise a loan of RUB100 million (US$3.26 million) by the end of 2010, Dmitry Noskov said.

The head of the poultry farm, Vladimir Burkeyev, said the chickens were slaughtered after the farm failed to attract a RUB100 million (US$3.26 million) loan from the country's agricultural bank, Rosselkhozbank, because of the property arrest imposed by a Kursk arbitration court. The farm, according to Burkeyev, intended to use the raised funds to pay back multimillion ruble wage arrears, energy bills and purchase feed.

"After the story of the poultry farm became public, several banks and financial companies showed interest in buying the entire farm's debts and offered a loan to the enterprise," Noskov, the farm's spokesman,  said. He declined to reveal the names of the banks which the farm was negotiating with.

"The parties are currently discussing a loan granting mechanism. Granting of the loan is complicated due to the fact that the farm's property is still under arrest," Noskov said, adding that in addition to the RUB100 million (US$3.26 million) loan, the company was also asking for an unsecured six-month loan, which would exceed RUB100 million (US$3.26 million).

"Besides, the farm has applied to financial companies with a request to grant a RUB1.5 billion (US$49 million) loan in exchange for 51% of Krasnaya Polyana's stake to stop the bankruptcy proceedings. If signed, an agreement must stipulate that Krasnaya Polyana will be able to buy back the stake for RUB2 billion (US$65.3 million) within the next five years," Noskov said, adding that several companies had already showed interest in it.