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Russian bank eyes takeover of turkey producer Eurodon

Post a commentBy Eugene Vorotnikov , 26-Jun-2017

Turkey producer Eurodon may be taken over by Vnesheconombank
Turkey producer Eurodon may be taken over by Vnesheconombank

Vnesheconombank (VEB), one of Russia’s largest state-owned banks, may gain control over much of Eurodon Group, the major Russia-based turkey producer. 

The move, should it happen, would be because of money owed by Eurodon to VEB. A spokesman for the Russian Federal Antimonopoly Service (FAS) said that his agency has received an application from VEB for the acquisition of stakes in three key companies within the Eurodon group, which is owned by high profile business leader Vadim Vaneev. According to the FAS, these include a 45% stake in Eurodon, a 100% stake in Eurodon-South, as well as a 51% stake in Ursdon. The first two companies are engaged in industrial turkey farming, while the third specialises in the production of incubation eggs.

According to the data from the Russian Unified State Register of Legal Entities, which is operated by the Federal Tax Service of Russia, these stakes are currently owned by the founder and main owner of the Eurodon Group, Vadim Vaneev. The bank already owns 40% of Eurodon and 49% of Ursdon.

In comments sent to GlobalMeatNews, Sergey Gorkov, chairman of VEB, commented: “VEB is the largest creditor of the Eurodon Group of Companies, while total debt of the company to the bank is estimated at $50 billion [$835 million]. The bank is currently considering the possibility of conducting talks for the restructuring of Eurodon’s debts.”

Eurodon has been faced with serious problems since last December, after the discovery of bird flu at one of its sites. This forced the company to destroy a significant part of its stock. A few months later, in April 2017, avian influenza was again discovered at the company’s facilities. In total, due to illness, the company has killed slaughtered about 1 million turkeys. Vaneev, in an interview with numerous Russian language media outlets, estimated the total financial damage from two outbreaks at RUB2.6bn ($43m). In April, the company stopped shipping products to domestic retail chains.

Despite the regulatory application from the bank, Olga Grekova, an official representative of Vaneev, said that the businessman has no plans to sell Eurodon, while negotiations with creditors will continue. Grekova added that the parties are considering a range of options to solve the existing problems.

Last year the Eurodon group produced 74,500 tonnes of products, the majority of which was turkey meat. Eurodon has planned to expand production this year to 150,000 tonnes, but now it is projecting output in the range of 60,000-70,000 tonnes.

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