TIDMLKI
RNS Number : 3697U
Landkom International Plc
20 December 2011
FOR IMMEDIATE RELEASE
20 December 2011
Not for release, publication or distribution in or into any
jurisdiction where to do so would constitute a violation of the
relevant laws of that jurisdiction
Recommended acquisition
of the whole of the issued and to be issued share capital of
LANDKOM INTERNATIONAL PLC
by
ALPCOT AGRO AB
to be effected by Scheme of Arrangement under section 157 of the
Isle of Man Companies Act 2006 (as amended)
and
Landkom Trading Update and Change of Accounting Reference Date
for Landkom
Summary
-- The boards of Alpcot Agro and Landkom announce that they have
reached agreement on the terms of the recommended acquisition by
Alpcot Agro of the entire issued and to be issued share capital of
Landkom.
-- An attractive opportunity to combine two companies with
complementary businesses and strengths and to enhance the
competitiveness of the respective businesses.
-- Potential for improvements in the respective businesses
through identified operational, financial and trading
synergies.
-- Under the terms of the Acquisition, Landkom Shareholders will
be entitled to receive:
For every 22.16 Landkom Shares: 1 New Alpcot Agro Share.
-- Based on a closing price of 58.20 pence (SEK 6.25) per Alpcot
Agro Share on 19 December 2011 (being the last practicable date
prior to this Announcement), the terms of the Acquisition value the
existing issued share capital of Landkom at approximately GBP11.42
million (SEK 122,692,632).
-- Based on the average closing price over the last 20 trading
days of 66.07 pence (SEK 7.10) per Alpcot Agro Share, the terms of
the Acquisition value the existing issued share capital of Landkom
at approximately GBP12.97 million (SEK 139,280,676).
-- The exchange ratio has been derived from published net asset
values (following certain adjustments) given both Landkom and
Alpcot Agro trade at significant discounts to net asset value.
-- Landkom is also today announcing a trading update and a
change to its accounting reference date. Your attention is drawn to
paragraph 9 (Landkom Trading Update and Change of Accounting
Reference Date for Landkom) of this Announcement for further
details.
-- Following the completion of the Acquisition, Landkom
Shareholders will hold approximately 16.43 per cent. of the issued
share capital of the Enlarged Group (excluding the Placing Shares).
Pursuant to the proposals to Landkom Option Holders, Landkom Option
Holders will receive up to 686,316 New Alpcot Agro Shares,
representing up to 0.57 per cent. of the issued share capital of
the Enlarged Group (excluding the Placing Shares).
-- The consideration under the terms of the recommended
Acquisition represents a value of approximately 2.98 pence (SEK
0.32) per Landkom Share, based on the average closing price over
the last 20 trading days of 66.07 pence (SEK 7.10) per Alpcot Agro
Share.
-- The consideration under the terms of the recommended
Acquisition represents a value of approximately 2.62 pence (SEK
0.28) per Landkom Share, based on the closing price of 58.20 pence
(SEK 6.25) per Alpcot Agro Share on 19 December 2011 (being the
last practicable date prior to this Announcement).
-- Alpcot Agro will also issue Alpcot Agro Shares pursuant to
the Placing with a minimum subscription value of US$20 million (SEK
138,492,000), a minimum of US$17 million of which (SEK 117,718,200)
shall be pursuant to subscriptions in cash by certain investors and
US$3 million (SEK 20,773,800) shall be pursuant to the subscription
by Amako in accordance with the Amako Debt Agreement. As referred
to above, the Scheme is conditional, inter alia, upon the Placing
becoming unconditional in accordance with its terms. The Placing is
not underwritten.
-- The Placing is being conducted through an accelerated
book-building process which is being carried out today by Alpcot
Agro book runner Pareto Ohman. A separate announcement will be made
by Alpcot Agro today setting out further details of the Placing and
the book-building process.
-- Alpcot Agro anticipates that certain Alpcot Agro Shareholders
and Landkom Shareholders and other new potential investors will
indicate their support for the Placing up to a minimum of US$20
million (SEK 138,492,000) (including the US$3 million subscription
by Amako in accordance with the Amako Debt Agreement). Landkom
Shareholders should be aware however that as at the date of this
Announcement, no contractually binding orders have been received in
respect of the Placing, but they can be expected to be obtained
tomorrow and a further announcement will be issued tomorrow in this
respect. At that stage confirmation will be given about the
percentage holding of the Landkom Shareholders and the Landkom
Option Holders in the Enlarged Group following the Acquisition and
the Placing. As a result, as at the date of this announcement there
can be no guarantee that the book-building process will be
completed and that the Placing will proceed. If the Placing does
not proceed, the Scheme will lapse and the Implementation Agreement
will be terminated.
-- Alpcot Agro intends to procure the repayment to Amako, in
aggregate, of up to a total of US$15.7 million (SEK 108,716,220) in
respect of outstanding short term trade payables, financial
assistance and prepayments owed by the certain members of the
Landkom Group to Amako. In accordance with the terms of the Amako
Debt Agreement, which was signed today, conditional upon the Scheme
becoming Effective, Alpcot Agro shall assume liability for US$3
million of the indebtedness owed by relevant members of the Landkom
Group to Amako and shall issue a promissory note to Amako in
respect of such amount which shall be satisfied by the issue of
Placing Shares to Amako pursuant to the Placing. Alpcot Agro
intends, upon completion of the Placing and conditional upon the
Scheme becoming Effective, to procure the repayment of the balance
of such indebtedness (as reduced as a result of the Amako Debt
Agreement) by mid-February 2012.
-- Alpcot Agro intends to use the balance of the proceeds from
the Placing to provide working capital for the Enlarged Group's
Ukrainian operations, up to US$2 million (SEK 13,849,200) to fund
additional investments in the Ukraine and the remainder will be
used to meet transaction and restructuring costs arising in
relation to the Acquisition.
-- Conditional upon the Scheme becoming Effective, Alpcot Agro
proposes to allow Landkom Option Holders who hold options over
Landkom Shares which are outstanding as at the date of this
Announcement (including options that are out of the money by
reference to the prevailing price of Landkom Shares and Alpcot Agro
Shares) to surrender their options in exchange for the allotment to
them of up to 686,316 Alpcot Agro Shares in aggregate representing
up to 0.57 per cent. of the enlarged issued share capital of Alpcot
Agro on the Effective Date (excluding any Placing Shares). Further
details of the proposed arrangements between Alpcot Agro and the
Landkom Option Holders are set out in paragraph 14 of this
announcement.
-- The Directors of Alpcot Agro have confirmed their intention
to seek to list the Enlarged Group on the Main Market of the London
Stock Exchange during the second half of 2012, and later, will seek
a listing on the Main Market of NASDAQ OMX Stockholm. The Alpcot
Agro Directors believe this will provide a more liquid platform for
investors seeking to benefit from the long term prospects of
agricultural investment in eastern Europe.
-- Landkom Shareholders should note that as the consideration
for the Acquisition constitutes New Alpcot Agro Shares, the value
of the Acquisition for Shareholders may vary depending on the
prevailing price of Alpcot Agro Shares.
-- The Acquisition is to be effected by scheme of arrangement
under section 157 of the Isle of Man Companies Act 2006 (as
amended), which requires the approval of Landkom Shareholders and
the sanction of the scheme by the Court. The terms of the Scheme
are summarised in this announcement and will be set out in full in
the Scheme Document to be sent to Landkom Shareholders shortly.
-- The Directors of Landkom, who have been advised by Liberum
Capital, consider the terms of the Acquisition to be fair and
reasonable. In providing its advice to the Landkom Directors,
Liberum Capital has taken into account a number of factors
including the current financial position and existing funding
available to Landkom and the commercial assessment of the Landkom
Directors.
-- Accordingly, the Landkom Directors unanimously recommend that
Landkom Shareholders vote in favour of the Resolutions (or if the
Acquisition proceeds by way of a takeover offer, to accept or
procure acceptance of such offer), as they have irrevocably
undertaken to do in respect of their own entire beneficial holdings
amounting to 3,678,601 Landkom Shares, representing approximately
0.86 per cent. of the entire issued share capital of Landkom.
-- The Offer will be subject to the Conditions and certain
further terms referred to in Appendix 1 to this announcement and to
be set out in the Scheme Document. These Conditions include, inter
alia, the approval of the Anti-Monopoly Commission of Ukraine being
obtained and the Placing becoming unconditional.
-- To become effective, the Acquisition will require, amongst
other things, the passing of an ordinary resolution approving
changes to the Articles of Association of Landkom and the passing
of the resolution to approve the Scheme at the meeting of Landkom
Shareholders to be convened by the Court.
-- Alpcot Agro has received irrevocable undertakings to vote in
favour of the Resolutions from the Landkom Directors in respect of
their entire legal and beneficial holdings of Landkom Shares
amounting to, in aggregate, 3,678,601 Landkom Shares, representing
approximately 0.86 per cent. of the existing issued share capital
of Landkom.
-- In addition, Alpcot Agro has received irrevocable
undertakings to vote in favour of the Resolutions or to procure
that any other person votes in favour of the Resolutions in respect
of a total of 130,422,355 Landkom Shares representing approximately
29.98 per cent. of the existing issued share capital of
Landkom.
-- Alpcot Agro has also received a letter of intent indicating
an intention to vote in favour of the Resolutions or to procure
that any other person votes in favour of the Resolutions in respect
of a total of 58,799,910 Landkom Shares representing approximately
13.51 per cent. of the existing issued share capital of
Landkom.
-- In aggregate, Alpcot Agro has therefore received irrevocable
undertakings and letters of intent to vote in favour of the
Resolutions or to procure that any other person votes in favour of
the Resolutions in respect of a total of 192,900,866 Landkom Shares
representing approximately 44.35 per cent. of the Landkom
Shares.
-- Full details of the undertakings referred to above and the
conditions on which they lapse are set out in paragraph 4 of this
announcement.
Commenting on the Acquisition, Neil Balfour, Chairman of
Landkom, said:
"Our ambition of becoming a substantial producer and processor
of agricultural commodities for the global food and biofuel markets
has become increasingly difficult to fulfil without access to
substantial additional working capital. We need to refinance an
important proportion of our working capital facilities if we are to
operate effectively as a stand alone entity and maintain, let alone
increase, today's level of cropping. This recommended takeover
provides Landkom with the financial stability to realise the full
value of our attractive assets in Ukraine and its shareholders with
the opportunity to be part of a much larger, multi-national group
with more diversified operations and assets."
Commenting on the Acquisition, Joakim Ollen, Chairman of Alpcot
Agro, said:
"A business combination of Alpcot Agro and Landkom is of great
value for our company for several reasons. Better use of our
management resources in Ukraine, more efficient production units
and a better balance between our operations in Russia and Ukraine
are some of the reasons why I see this combination as exceptionally
positive for future profitability. Hereby significant value is
created for our shareholders. Two medium sized agricultural
companies unite and become a global top player in terms of cropped
acreage. The merger will enable immediate cost synergies and a more
liquid traded share. We have already established a close and
productive dialogue with Landkom management and Board of Directors,
and feel that our views are shared by them. This bodes well for the
upcoming integration. We look forward to carrying out this positive
move, and ask all shareholders of Landkom and Alpcot Agro to give
their support."
Commenting on the Acquisition, Katre Saard, Director of Alpcot
Agro Ukraine, said:
"We are very excited about the opportunity to combine Alpcot
Agro's and Landkom's operations. The proximity of our land banks in
Western Ukraine enables multiple synergies. The balance of the
combined entity's operations between Western Ukraine, Kaliningrad,
and the Central Black Earth region in Russia allows us to mitigate
any significant weather events. In both countries, we will have
potential for significant improvements in crop yield. Both
companies have made large strides in the last year toward improved
financial performance, and we believe that our accumulated
experience and the efficiencies created in the combined entity will
increase the pace of these improvements."
The Scheme Document containing further details of the
Acquisition (including a notice of Extraordinary General Meeting
and a notice of the Court Meeting together with Forms of Proxy)
will be posted to Landkom Shareholders and, for information only,
to Landkom Option Holders as soon as practicable and, in any event,
within 28 days of this announcement.
A copy of this Announcement will be available, subject to
certain restrictions in relation to restricted jurisdictions, at
www.landkom.net and www.alpcotagro.com.
Enquiries:
Alpcot Agro
Bjorn Lindstrom Tel: +44 (0)79798 55556
Katre Saard Tel: +44 (0)79798 55557
Landkom
Neil Balfour Tel: +44 (0) 20 7726 2690
Liberum Capital (Nominated Adviser
and Broker to Landkom)
Simon Atkinson Tel: +44 (0) 20 3100 2000
Tim Graham
College Hill
Adrian Duffield Tel: +44 (0) 20 7457 2020
Rozi Morris
Liberum Capital is acting exclusively for Landkom in connection
with the Acquisition and will not be responsible to any person
other than Landkom for providing the protections afforded to
clients of Liberum Capital or for providing advice in relation to
the Acquisition or any other matter referred to in this
announcement.
This Announcement is for information purposes only and does not
constitute, or form part of, any offer for, or any solicitation of
any offer for, securities. Any votes in favour of the Scheme or
other response to the Acquisition should be made only on the basis
of information referred to in the Scheme Document, which Alpcot
Agro intends to despatch shortly to Landkom Shareholders and, for
information only, to participants in the Landkom Share Schemes.
The availability of the Alpcot Agro Shares to persons who are
not resident in the United Kingdom may be affected by the laws of
their relevant jurisdiction. Such persons should inform themselves
of, and observe, any applicable legal or regulatory requirements of
their jurisdiction. Further details in relation to overseas
shareholders will be contained in the Scheme Document.
The Acquisition referred to in this Announcement will not
constitute an offer made, directly or indirectly, in, into or by
use of the mails of, or by any means or instrumentality (including,
without limitation, telephonically or electronically) of interstate
or foreign commerce of, or any facilities of a national securities
exchange of, the United States, Canada, Australia or Japan or any
other jurisdiction if to do so would constitute a violation of the
relevant laws of such jurisdiction. This Announcement does not
constitute an offer in the United States, Canada, Australia or
Japan or any such other jurisdiction and the Acquisition will not
be capable of acceptance by any such use, means, instrumentally or
facilities or otherwise from or within the United States, Canada,
Australia or Japan or any such other jurisdiction. Accordingly this
Announcement is not being, and should not be, mailed, transmitted
or otherwise distributed, in whole or in part, in or into or from
the United States, Canada, Australia or Japan or any such other
jurisdiction.
Landkom Shareholders (including, without limitation, nominees,
trustee or custodians) must not forward this Announcement to the
United States, Canada, Australia, Japan or other such jurisdiction
where to do so would be unlawful.
The directors of Alpcot Agro accept responsibility for the
information contained in this announcement other than information
for which the Landkom Directors accept responsibility as set out
below. To the best of the knowledge and belief of the directors of
Alpcot Agro (who have taken all reasonable care to ensure that such
is the case), the information contained in this announcement for
which they accept responsibility is in accordance with the facts
and does not omit anything likely to affect the import of such
information.
The Landkom Directors (all of whose names will be set out in the
Scheme Document) accept responsibility for their recommendation of
the Acquisition contained in this announcement, the information
relating to Landkom, the Landkom Group, and themselves and their
immediate families, related trusts and connected persons. To the
best of the knowledge and belief of the Landkom Directors (who have
taken all reasonable care to ensure that such is the case), such
information for which they are responsible is in accordance with
the facts and does not omit anything likely to affect the import of
such information.
IMPORTANT NOTICE
Due to the fact that Landkom is not managed and controlled in
the United Kingdom, the Channel Islands or the Isle of Man, the
Takeover Panel has confirmed to Landkom that the Acquisition is not
subject to the City Code on Takeovers and Mergers (the "Code").
Accordingly the disclosures in connection with the Acquisition are
not the same as those that apply under the Code and in particular
Alpcot Agro Shareholders and Landkom Shareholders should note that
there is no requirement to make opening position disclosures or
dealing disclosures during the period of the Acquisition.
CAUTIONARY NOTICE REGARDING FORWARD LOOKING STATEMENTS
This Announcement contains certain forward looking statements
with respect to the financial condition, results of operations and
business of Landkom or Landkom Group and certain plans and
objectives of the boards of directors of Landkom and Alpcot Agro.
These forward looking statements can be identified by the fact that
they do not relate to historical or current facts. Forward looking
statements often use words such as "anticipate", "target",
"expect", "estimate", "intend", "plan", "goal", "believe", "will",
"may", "should", "would", "could" or other words of similar
meaning. These statements are based on assumptions and assessments
made by the boards of directors of Landkom and Alpcot Agro in the
light of their experience and their perception of historical
trends, current conditions, expected future developments and other
factors they believe appropriate. By their nature, forward looking
statements involve risk and uncertainty and the factors described
in the context of such forward looking statements in this
Announcement could cause actual results and developments to differ
materially from those expressed in or implied by such forward
looking statements.
Should one or more of these risks or uncertainties materialise,
or should underlying assumptions prove incorrect, actual results
may vary materially from those described in this Announcement.
Landkom and Alpcot Agro assume no obligation to update or correct
the information contained in this Announcement.
FOR IMMEDIATE RELEASE
20 December 2011
Not for release, publication or distribution in or into any
jurisdiction where to do so would constitute a violation of the
relevant laws of that jurisdiction
Recommended acquisition
of the whole of the issued share and to be issued capital of
LANDKOM INTERNATIONAL PLC
by
ALPCOT AGRO AB
to be effected by Scheme of Arrangement under section 157 of the
Isle of Man Companies Act 2006 (as amended)
and
Landkom Trading Update and Change of Accounting Reference Date
for Landkom
1. Introduction
The boards of Alpcot Agro and Landkom announce that they have
reached agreement on the terms of the recommended acquisition by
Alpcot Agro of the entire issued and to be issued share capital of
Landkom.
2. The Acquisition
The Acquisition is to be effected by a scheme of arrangement
under section 157 of the Isle of Man Companies Act 2006 (as
amended) and requires the approval of both Landkom Shareholders and
the sanction of the Court.
The Acquisition, which will be subject to the conditions and
certain further terms set out in Appendix I, and to be set out in
full in the Scheme Document, will be made on the following
basis:
For every 22.16 Landkom Shares: 1 New Alpcot Agro Share
Fractions of New Alpcot Agro Shares will not be allotted or
issued to holders of Scheme Shares pursuant to the Scheme. All
fractional entitlements to which holders of Scheme Shares would
have become entitled will be aggregated and sold by Alpcot Agro's
brokers at the best price which can reasonably be obtained at the
time of sale and the net proceeds of sale distributed pro rata to
the Scheme Shareholders entitled thereto, save where the value (net
of expenses) of such entitlement does not exceed GBP5. The New
Alpcot Agro Shares will be admitted to trading on NASDAQ OMX First
North immediately following their issue.
As the consideration for the Acquisition constitutes New Alpcot
Agro Shares, the value of the Acquisition for Shareholders may vary
depending on the prevailing price of Alpcot Agro Shares.
The consideration under the terms of the Acquisition represents
a value of 2.62 pence (SEK 0.28) per Landkom Share, based on the
Closing Price of 58.20 pence (SEK 6.25) per Alpcot Agro Share on 19
December 2011 (being the latest practicable date prior to this
Announcement). The consideration under the terms of the Acquisition
represents a value of approximately 2.98 pence (SEK 0.32) per
Landkom Share, based on the average closing price over the last 20
trading days of 66.07 pence (SEK 7.10) per Alpcot Agro Share.
On 19 December 2011 (being the latest practicable date prior to
this Announcement) Alpcot Agro and Landkom valued the existing
share capital of Landkom at approximately GBP11.42 million (SEK
122,692,632) based on an offer price of 2.62 pence (SEK 0.28) per
Landkom Share. Based on the average closing price over the last 20
trading days of 66.07 pence (SEK 7.10) per Alpcot Agro Share, the
terms of the Acquisition value the existing issued share capital of
Landkom at approximately GBP12.97 million (SEK 139,280,676).
If the Scheme becomes Effective, it will result in the issue of
approximately 19,630,367 New Alpcot Agro Shares to Landkom
Shareholders. These New Alpcot Agro Shares would represent
approximately 16.43 per cent. of the enlarged issued share capital
of the Enlarged Group on the Effective Date (excluding the Placing
Shares). Pursuant to the proposals to Landkom Option Holders,
Landkom Option Holders will hold up to 0.57 per cent of the issued
share capital of the Enlarged Group (excluding the Placing Shares).
A further announcement will be made following the close of the
Placing book-building process in which confirmation will be given
of the percentage holdings of the Landkom Shareholders and the
Landkom Option Holders in share capital of the Enlarged Group as
enlarged by the Acquisition and the Placing.
3. Recommendation
The Directors of Landkom, who have been advised by Liberum
Capital, consider the terms of the Acquisition to be fair and
reasonable. In providing its advice to the Landkom Directors,
Liberum Capital has taken into account a number of factors
including the current financial position and existing funding
available to Landkom and the commercial assessment of the Landkom
Directors.
Accordingly, the Landkom Directors unanimously recommend Landkom
Shareholders to vote in favour of the Resolutions (or if the
Acquisition proceeds by way of a takeover offer, to accept or
procure acceptance of such offer) as those Landkom Directors who
hold Landkom Shares have irrevocably undertaken to do in respect of
their own personal beneficial holdings of 3,678,601 Landkom Shares,
representing approximately 0.86 per cent. of the entire issued
share capital of Landkom.
4. Irrevocable undertakings
Irrevocable undertakings to vote in favour of the Resolutions
have been given by the Landkom Directors who hold Landkom Shares in
respect of a total of 3,678,601 Landkom Shares, representing in
aggregate approximately 0.86 per cent of Landkom's existing issued
share capital.
In addition, Alpcot Agro has received irrevocable undertakings
to vote in favour of the Resolutions or to procure that any other
person votes in favour of the Resolutions from Hunter Hall
Investment Management in respect of 79,868,460 Landkom Shares, Odey
Asset Management LLP in respect of 20,677,825 Landkom Shares and
Kairos Investment Management in respect of 29,876,070 Landkom
Shares representing in aggregate approximately 29.98 per cent. of
the existing issued share capital of Landkom.
The irrevocable undertakings given by the Landkom Directors will
remain in force even if a superior firm offer for the entire issued
share capital of Landkom is announced. The other irrevocable
undertakings shall cease to have effect in the event that, inter
alia, a firm offer for the entire issued share capital of Landkom
is made pursuant to which, in the reasonable opinion of Liberum
Capital Limited, the value of the consideration per ordinary share,
at the time it is made exceeds an amount per Landkom Share which is
10 per cent. more than the higher of: (i) the consideration per
Landkom Share available under the Acquisition as set out in this
Announcement; and (ii) the consideration per Landkom Share
available under the Acquisition as valued at the time such higher
offer is made, and provided that a period of seven days has elapsed
from the announcement of such higher offer without Alpcot Agro
having revised the terms of the Acquisition so that the value of
the consideration offered by Alpcot Agro exceeds that offered under
that higher offer. All of the irrevocable undertakings will cease
to have effect if the Scheme does not proceed in accordance with
the expected timetable (or any agreed variation to it) of if the
Scheme lapses or is withdrawn.
Alpcot Agro has also received a letter of intent from Invesco
Asset Management Limited who is beneficially interested in or
otherwise able to control 58,799,910 Landkom Shares indicating its
intention to vote in favour of the Resolutions or to procure that
any other person votes in favour of the Resolutions in respect of a
that number of Landkom Shares representing approximately 13.51 per
cent. of the existing issued share capital of Landkom.
In aggregate, Alpcot Agro has therefore received irrevocable
undertakings and letters of intent to vote in favour of the
Resolutions or to procure that any other person votes in favour of
the Resolutions in respect of a total of 192,900,866 Landkom Shares
representing approximately 44.35 per cent. of the Landkom Shares
held by Landkom Shareholders.
5. The Placing
Alpcot Agro will issue New Alpcot Agro Shares through the
Placing with a minimum subscription value of US$20 million (SEK
138,492,000) of which a minimum of US$17 million (SEK 117,718,200)
shall be pursuant to subscriptions in cash and US$3 million (SEK
20,773,800) shall be pursuant to the subscription by Amako made in
accordance with the Amako Debt Agreement. As referred to above, the
Scheme is conditional, inter alia, upon the Placing becoming
unconditional. The Placing is not underwritten.
The Placing is being conducted through an accelerated
book-building process which is being carried out today by Alpcot
Agro book runner Pareto Ohman. A separate announcement will be made
by Alpcot Agro today setting out further details of the Placing and
the book-building process.
Alpcot Agro anticipates that certain Alpcot Agro Shareholders
and Landkom Shareholders and other new potential investors will
indicate their support for the Placing up to a minimum of US$20
million (SEK 138,492,000) (including the US$3 million subscription
by Amako in accordance with the Amako Debt Agreement). Landkom
Shareholders should be aware however that as at the date of this
Announcement, no contractually binding orders have been received in
respect of the Placing, but they can be expected to be obtained
tomorrow and a further announcement will be issued tomorrow in this
respect. At that stage, confirmation will be given about the
percentage holding of the Landkom Shareholders and the Landkom
Option Holders in the Enlarged Group following the Acquisition and
the Placing. As a result, as at the date of this announcement there
can be no guarantee that the book-building process will be
completed and that the Placing will proceed. If the Placing does
not proceed, the Scheme will lapse and the Implementation Agreement
will be terminated.
Alpcot Agro intends to procure the repayment to Amako, in
aggregate, of up to a total of US$15.7 million (SEK 108,716,220)
owed by the certain members of the Landkom Group to Amako in
respect of outstanding short term trade payables, financial
assistance and prepayments. In accordance with the terms of the
Amako Debt Agreement, which was signed today, Alpcot Agro shall
assume liability for US$3 million (SEK 20,773,800) of the
indebtedness owed by the relevant members of the Landkom Group to
Amako and shall issue a promissory note to Amako in respect of such
amount which shall be satisfied by the issue of Placing Shares to
Amako under the Placing. Alpcot Agro intends, upon completion of
the Placing and conditional upon the Scheme becoming Effective, to
procure the repayment of the balance of such indebtedness (as
reduced as a result of the Amako Debt Agreement) by mid-February
2012.
The balance of the proceeds from the Placing are to be used to
provide working capital for the Enlarged Group's Ukrainian
operations, up to US$2 million (SEK 13,849,200) to fund additional
investments in the Ukraine and to meet transaction and
restructuring costs arising in relation to the Acquisition.
For the purposes of effecting the Placing, Alpcot Agro is
required to obtain shareholder approval by way of ordinary
resolutions to be sought at the Alpcot Agro Shareholder Meeting.
The Alpcot Agro Board has received irrevocable undertakings to vote
in favour of the resolutions to be proposed at the Alpcot Agro
Shareholder Meeting from shareholders holding, in aggregate,
approximately 36.27 per cent. of Alpcot Agro's existing issued
share capital.
6. Background to and reasons for recommending the Acquisition
The Landkom Directors believe that the Acquisition represents an
attractive opportunity to combine two groups with complementary
businesses and assets to create an Enlarged Group with enhanced
efficiencies and financial strength. The exchange ratio has been
derived from published net asset values (following certain
adjustments) given both Landkom and Alpcot Agro trade at
significant discounts to net asset value.
The Enlarged Group created by the Acquisition will have large
scale farming operations spread across both Russia and Ukraine. The
Enlarged Group will have approximately 155,000 hectares of planted
land.
At the time of Landkom's admission to AIM in 2007, Landkom
stated in its admission document that it could potentially grow its
land bank to 350,000 hectares. However the financial crisis in 2008
resulted in Landkom experiencing larger than expected operating
losses and lower cash flows and, as a result, Landkom revised its
land strategy to that of maintaining a land bank of approximately
74,000 hectares. In the past 18 months, progress has been made in
consolidating the land bank through a land-swap programme and the
amount of harvested land has consistently increased. Nevertheless,
the Landkom Directors believe that the land holdings remain below
optimal efficiency and greater benefits can be achieved through the
creation of the Enlarged Group.
Landkom has made progress in terms of cost control within the
business since its first harvests in 2007 and 2008. The original
machinery which was purchased with funds raised at the time of
Landkom's admission to AIM was not optimal for the scale of
Landkom's operations in Ukraine and the Landkom Directors believe
that further capital investment in equipment and machinery would be
required in order to continue to deliver the desired level of
efficiency within the business.
On 7 September 2011, Landkom announced its wheat and rapeseed
harvest results. The wheat harvest results were satisfactory but
the rapeseed harvest was disappointing, and consequently Landkom
announced it would not make a profit for the financial year ended
31 October 2011. Notwithstanding a better maize harvest than in
previous years, the Landkom Directors now believe that Landkom will
likely incur an EBITDA loss for the 2011 financial year. Further
details of the trading update are described later in paragraph 9
(Landkom Trading Update and Change of Accounting Reference Date for
Landkom) of this Announcement.
In order to expand the level of cropped land, Landkom has relied
in part on its main trade supplier, Amako, for extending flexible
trade payable terms together with its short term bank facilities.
As at the end of September 2011, short term trade payables to
Amako, financial assistance and prepayment from Amako in aggregate
amounted to US$14.1 million (SEK 97,636,860). These short term
trade payables need to be refinanced and the short term liabilities
have left Landkom with limited working capital flexibility. Upon
completion of the Placing and upon the Scheme becoming Effective,
Alpcot Agro will repay US$3 million of such indebtedness that it
has assumed under the Amako Debt Agreement (to be settled through
the issue of Placing Shares to Amako under the Placing) and Alpcot
Agro intends to procure the repayment of the resulting balance by
mid-February 2012.
Following the Acquisition and the Placing, the Landkom Directors
believe the Enlarged Group will have greater financial flexibility
and will be in a position to reduce short term trade payables to a
normal operating level. The Landkom Directors also believe the
Enlarged Group's unleveraged structure will also enable it to
attract more competitive terms for refinancing Landkom's existing
credit facility and establishing new lease agreements to finance
new replacement machinery.
The Landkom Directors believe that following the Acquisition,
the Enlarged Group will have a land bank and planted land to rival
the largest operators in the global market. The Landkom Directors
believe that the scale of the Enlarged Group will enable it to
deliver the maximum revenue for the commodities produced and will
have a stronger purchasing power for inputs and machinery. Weather
risk will be spread across a wider region which will reduce the
risk to the Enlarged Group of serious weather events.
Commitments have been made by Alpcot Agro to retain the best of
Landkom's operating management team to ensure that experience from
past years is retained in the business and to enable the best
practices of both businesses to be developed. The Alpcot Agro
farming strategy in Ukraine is similar to that of Landkom in terms
of crop mix, cost structure and execution which will facilitate
integration.
The Landkom Directors believe that following a listing on the
Main Market of the London Stock Exchange (which Alpcot Agro has
stated is its intention to seek for the Enlarged Group in 2012),
the Enlarged Group will be an attractive, more liquid vehicle for
investors seeking to benefit from the long term prospects of
agricultural investment in Eastern Europe
7. Background to and reasons for the Acquisition
The Alpcot Agro Board and management of Alpcot Agro believe that
the Acquisition represents an attractive opportunity to combine two
companies with complementary businesses and strengths and to
enhance the competitiveness of the respective businesses.
Landkom operates a land bank located in highly fertile regions
of western Ukraine, applies modern agriculture technologies and
utilizes productive western equipment. However, the Alpcot Agro
Board and management of Alpcot Agro believe there is a substantial
potential for significant improvements in Landkom's future
operational efficiency by addressing Landkom's ongoing funding
constraints and combining the two businesses to create the Enlarged
Group. These operational improvements could lead to increased
yields, decreased costs and strengthened financial results for the
Enlarged Group after the Acquisition.
Comparison of Alpcot Agro and Landkom Operations
Alpcot Landkom
Agro Ukraine
Total land Ukraine (ha) 18,800 79,230
Harvested land Ukraine 2011 (ha) 13,700 50,852(1)
Revenue per ha winter wheat 2011
(US$) 740(1) 602(1)
Revenue per ha corn 2011 (US$) 1,751(1) 1,329(1)
Gross profit per ha winter wheat
2011 (US$) 167(1) 102(1)
Gross profit per ha corn 2011
(US$) 871(1) 452(1)
Yield winter wheat 2011 (ton/ha) 4.3 3.5(1)
Yield winter wheat 2010 (ton/ha) 2.4 2.7
Yield corn 2011 (ton/ha) 8.3(1) 6.3(1)
Yield corn 2010 (ton/ha) 6.8 5.0
Number of employees 100 966
Harvested ha per employee 137 53(1)
(1) Estimates
The Alpcot Agro yields are estimated net yields for 2010 and
actual net yields for 2011, whereas all Landkom yields are net
harvested yields.
Alpcot Agro believes that there is potential to reduce Landkom's
indirect costs by approximately 30 per cent per hectare over two
years following the Acquisition as a result of the integration of
Landkom and Alpcot Agro.
Alpcot Agro anticipates reductions of indirect costs of US$115
(SEK 796.33) per hectare due to planned operating measures over a
four year period in the Enlarged Group.
A Pro Forma Balance Sheet in respect of the Enlarged Group is
included at Appendix IV.
Operational synergies
Climate diversification
Alpcot Agro's land bank is primarily concentrated in central
Russia, where there is an inherent risk of limited rainfall and
drought. Landkom's land bank is primarily located in western
Ukraine, where, due to its proximity to the Carpathian Mountains,
higher precipitation is normal. Accordingly, the Alpcot Agro
Directors believe that the Acquisition would allow additional
diversification of the Enlarged Group's land bank, thereby
mitigating the climate risk.
Volume discounts and extended credit terms from suppliers of
inputs and M&E
Following the Acquisition, the Alpcot Agro Directors believe
that the Enlarged Group would be able to benefit from greater
volume discounts and extended credit terms from suppliers of inputs
(seeds, fertilizer, chemicals and fuel) and machinery and
equipment.
Decrease in logistic costs due to consolidated land plots and
enlarged operational areas
Certain of Landkom's fields in western Ukraine are located close
to Alpcot Agro's fields. Accordingly, the Alpcot Agro Directors
believe that the Enlarged Group's per hectare logistic costs (such
as fuel and transport) could be reduced.
Financial synergies
Easier access to equity and debt markets for the larger
entity
The Alpcot Agro Directors expect that the realisation of
operational synergies following the Acquisition will strengthen the
Enlarged Group's financial results, increase free cash flows and
improve liquidity which will result in easier access to equity and
debt markets.
Decrease in indirect costs
Alpcot Agro and Landkom are currently two independent publicly
listed companies, each responsible for the costs relating to their
shares being listed on a stock exchange and publicly traded such as
audit fees, board costs, public relations and other expenses.
Following the Acquisition, Landkom's shares will be delisted and
cease to be traded on AIM and the Enlarged Group's Shares will
remain listed only on NASDAQ OMX First North in Stockholm. As a
result, Landkom will no longer be required to meet the AIM
quotation costs of being listed referred to above. The Enlarged
Group could also reduce other indirect costs following the
Acquisition, such as management salaries, legal fees and insurance
premiums.
All indirect costs will be allocated on a larger cropped area
and this should reduce the required level of contribution per
hectare to achieve profitability.
Trading synergies
Improved share liquidity
Both Alpcot Agro and Landkom are currently considered "small
cap" companies on their respective stock exchanges. Following the
Acquisition, the Alpcot Agro Directors believe that in the long
term the Enlarged Group should expect a larger stock market
capitalisation than that of either Alpcot Agro or Landkom prior to
the Acquisition. Furthermore, the number of shareholders will
increase as a result of the Acquisition which is expected to have a
positive impact on the liquidity of Alpcot Agro Shares on the stock
exchange and can therefore be expected in general to have a
positive effect in terms of shareholder value.
If the Acquisition closes, the Alpcot Agro Board and management
of Alpcot Agro currently intend to seek a listing and admission to
trading of the Alpcot Agro Shares on the Main Market of the London
Stock Exchange during the second half of 2012. The Alpcot Agro
Board and management intend at a later date to seek a listing on
the Main Market of NASDAQ OMX Stockholm. The Alpcot Agro Board and
management believe this will provide a more liquid platform for
investors to benefit from the long term prospects of agricultural
investment in Eastern Europe.
Other synergies
Mitigation of political and country specific risks
Both Russia and Ukraine are emerging markets where the legal,
financial and economic systems are not as well developed as in
Western Europe. In such environments, decisions (especially
political ones), are easily influenced by arbitrary factors. Alpcot
Agro believe that the Enlarged Group can be expected to be better
able to protect its interests in the event of negative
developments.
Higher attractiveness for highly skilled personnel
The Russian and Ukraine agricultural sectors, particularly the
Russian one, are one of the last sectors in the two economies to
undergo rationalisation and modernisation. This process is slow and
it is accordingly difficult to find qualified specialists, both
domestic and foreign, for agricultural companies. Following the
Acquisition, the Enlarged Group is expected become more attractive
as an employer and will therefore be able more easily to source
qualified specialists.
8. Information on Landkom
Landkom is a Ukrainian producer of agricultural commodities
including rape seed, wheat, barley, maize and soya bean. These
commodities are supplied directly and via grain traders to the
global food and biofuel markets. Landkom was incorporated in Isle
of Man on 10 April 2007 as a company limited by shares and in
November 2007 its shares were admitted to trading on AIM.
Landkom's market capitalisation on 19 December 2011 (being the
latest practicable date prior to this Announcement) was
approximately GBP13.59 million (SEK 145,980,842). The Closing Price
per Landkom Share on 19 December 2011 (being the latest practicable
date prior to this Announcement) was 3.12 pence (SEK 0.33) and its
last published net asset value per Landkom Share as at 30 April
2011 was 7.1 pence (SEK 0.76).
Landkom was intended to become the transparent vehicle for UK
and European investors seeking an investment in emerging market
agriculture production. In order to achieve this, Landkom intended
to become one of Europe's leading feedstock suppliers to the
biofuels industry through rape seed production and a significant
producer of cereal crops for the food industry. These objectives
were targeted through environmentally sustainable farming
methods.
In order to achieve these objectives, Landkom has a number of
defined strategies.
-- Maintain strong relationships with land owners and local government
-- Continue to reduce costs to best in class
-- Maximise the cultivated proportion of the land bank
-- Develop and incentivise staff through modern remuneration
schemes and regular training
-- Develop own storage capability to enable more control of sales process
Operating Results
Winter Crops
Winter Rapeseed Winter wheat
2009 2010 2011 2009 2010 2011
Ha harvested 13,955 14,615 11,712 11,444 4,932 13,055
Yield (tonne/ha) 2.8 2.5 1.9 3.3 2.7 3.5
Revenue per ha 771 827 972 274 513 602
Cost per ha 1,153 653 776 842 433 500
Gross profit/(loss)
per ha (382) 174 197 (568) 80 102
Spring Crops
Maize Soya Spring wheat Sunflower
2010 2011 2010 2011 2010 2011 2010 2011
Ha harvested 6,053 10,577 2,140 1,690 2,797 5,137 2,349 1,948
Yield 5.0 6.3 1.6 1.2 3.0 2.9 1.5 2.1
Total production 30,227 66,312 3,475 2,057 8,475 14,913 3,558 4,034
Revenue per
ha 780 1,329 588 491 517 500 681 834
Cost per ha 566 877 420 599 464 466 430 375
Gross profit
per ha/(loss)
per ha 214 452 138 (108) 53 53 251 460
Until the 2009/10 harvest season Landkom cultivated winter crops
only. 2009 and 2010 saw considerable cost reductions and a move to
positive gross margins for most crops. In 2011 costs increased in
line with general increases in commodity prices and input prices
and yields remained broadly stable with the exception of rapeseed
which suffered from weather related losses.
Land bank
Ha under control Harvested
Crimea 6,396 6,275 98%
Ternopil 12,535 8,698 69%
Khmelnyskyi 2,915 1,250 43%
Ivano-Frankiv-sk 6,011 5,504 92%
Lviv 35,050 20,711 59%
Zhytomyr 12,307 6,110 50%
Rivne 4,015 2,305 57%
----------------- ----------
Total 79,230 50,852 64%
The location of Landkom's land bank is as set out in the table
above. A total of 64 per cent. of Landkom's land bank was harvested
in 2010/11. The average length of lease is 7.9 years.
Storage
Landkom constructed its first grain silo in the village of
Krasne in Lviv Oblast. The 20,000 tonne facility and railway line
is completed and certified. Key characteristics of the facility are
as follows:
-- 16 hectares rail side site;
-- 20,000 tonnes of storage capacity; and
-- US$7.5 million invested including purchase of equipment to
double drying and storage capacity.
In addition across its bases, Landkom owns five flat storage
buffer sites with up to 35,000 tonnes of storage capacity. Due to
dry harvest conditions in Landkom's southern Crimean operations,
drying facilities are not required and costs are reduced.
As part of Landkom's medium term strategy, Landkom seeks to
secure new or fully refurbished drying and storage facilities in
each of its operating areas.
Machinery
Landkom invested in a majority of its machinery at the time of
its admission to AIM in 2007 when a majority of its equity funding
was raised. This was a time of high demand for agricultural
machinery given record high soft commodity prices. In some
instances, this resulted in the purchase of available machinery
rather than the optimal machinery. A large part of the machinery
was imported from the UK and was smaller than required in the
Ukraine and some machinery was purchased used rather than new.
After the fall in commodity prices in 2008, all capital expenditure
was minimised. Investment recommenced on a smaller scale in 2010.
As an example, 40 out of Landkom's 78 tractors are under 200hp and
only one of Landkom's 78 tractors is less than three years old.
Four of Landkom's 18 combines are under three years old. Although
older machinery is appropriate for certain farming operations,
large scale corporate farming has very high machinery utilisation
over intensive periods and therefore cannot afford breakdowns,
therefore a modern fleet is required to deliver optimal
efficiency.
9. Landkom Trading Update and Change of Accounting Reference Date for Landkom
During the 2010/11 planting seasons, the Landkom Group planted
in total 51,988 hectares, a 30 per cent increase on the previous
year's planting programmes. On 7 September 2011, Landkom announced
its wheat and rapeseed harvest results. The wheat harvest results
were satisfactory but the rapeseed harvest was disappointing, and
consequently Landkom announced it would not make a profit for the
year to 31 October 2011.
Landkom today announces that it has now completed its remaining
harvest. The Landkom Group has harvested 66,681 tonnes of maize
(2010: 30,227) from 10,454 harvested hectares (2010: 6,053) with a
net yield of 6.4 t/ha (2010: 5.0 t/ha). Landkom expects to meet all
of its contracted export commitments of 35,000 tonnes at an average
gross price of US$279 per tonne delivered to a port in Odessa.
2,061 tonnes of soybean have been harvested (2010: 3,473) with a
net yield of 1.2 t/ha (2010: 1.6 t/ha) and 4,034 tons of sunflower
(2010: 3,558) with a net yield of 2.0 t/ha (2010: 1.5 t/ha).
Landkom has planted a total of 29,841 hectares (2010: 28,856) of
winter crops including 14,964 hectares of rapeseed, 10,089 hectares
of winter wheat and a further 4,788 hectares of winter barley, rye
and other crops.
In the past year, the expansion in cultivated land and equipment
has been financed by a bank working capital loan, lease finance
facilities and by relying upon extended trade terms from Landkom's
agri-suppliers, largely Amako. As at 30 September 2011, Landkom had
short term liabilities of US$24.1 million including payables of
US$14.1 million to Amako and US$5.3 million due to Raiffeissen
under its bank working capital loan.
Landkom also announces today that it will change its financial
year end to 31 December, and if the Acquisition completes, this
will ensure that its year end will match that of Alpcot Agro and
thereby reduce audit fees in 2012. Notwithstanding a better maize
harvest than in previous years, the Landkom Directors now believe
that Landkom will likely incur an EBITDA loss for the 14 month
period to 31 December 2011.
Landkom's cash flow remains weak and, if the Acquisition fails
to complete, it would need to arrange further bank facilities in
order to carry forward a spring planting programme and to
renegotiate a new repayment schedule with Amako. There is no
certainty that these refinancing arrangements and payables
renegotiations will be satisfactorily achieved against a background
of the Landkom Group's past losses particularly in the current
economic and financial climate.
10. Alpcot Agro current trading and prospects
Financial results
The most recent published interim financial report of Alpcot
Agro covers the six-month period ended 30 June 2011. The operating
result before depreciation and amortization for the period was SEK
24 million (-55 million). Total revenue and gains for the period
amounted to SEK 263 million (208 million), of which SEK 185 million
(119 million) was a gain from changes in fair value of biological
assets at the end of the reporting period. During the period
operating loss amounted to SEK -8 million (-85 million) and total
loss for the period amounted to SEK -34 million (-24 million). In
April 2011 the Company completed a preferential rights issue with
proceeds of SEK 322 million before transaction costs.
Cropping operations
On 17 November 2011 Alpcot Agro released its most recent harvest
report covering 92,300 hectares of harvested land, but with corn
harvest still ongoing. As at this date Alpcot Agro had harvested
about 257,000 tons gross weight of different crops.
As for sunflower, the average yield of 2.3 tons per hectare is a
historical record for the Company. In Voronezh and Tambov, Alpcot
Agro harvested nearly or over three tonnes per hectare. The higher
yields are due to both favourable weather and the application of
Clearfield technology.
This is the second year that Alpcot Agro has grown sugar beet
and it has turned out very well with yields above 31 tons per ha,
making sugar beet Alpcot Agro's fourth biggest crop in terms of
volume.
As at 17 November 2011 the average yield for corn amounted to
about 8.9 tons per hectare, with about two thirds of the planted
area still remaining to be harvested. So far the corn yields have
exceeded expectations, in particular in Ukraine with yields in
Lviv, Poltava and Rogatyn of around 9.5 tons per hectare. The final
harvest report for 2011 will be released when the corn harvest is
completed.
Cropped area, weights and yields as at 17 November 2011
Russian
inland, Kaliningrad, Ukraine,
planted planted planted Total area, Gross weight, Average yield,
Crop ha ha ha ha ton ton/ha
Winter wheat 34,600 1,500 5,500 41,600 119,000 2.9
Sunflower 16,100 0 0 16,100 36,600 2.3
Sugar beet 900 0 0 900 28,000 31.2
Corn (still
ongoing) 2,500 0 3,300 5,800 19,500 8.9
Barley 3,900 1,900 0 5,800 15,000 2.6
Spring wheat 4,000 1,700 0 5,700 9,500 1.8
Spring rape 2,900 2,700 0 5,600 8,000 1.4
Soya 1 ,700 0 2,500 4,200 6,800 1.7
Buckwheat 1,100 0 1,500 2,600 3,400 1.3
Winter rape 0 400 900 1,300 3,200 2.5
Beans 0 1,400 0 1,400 2,700 2.0
Other 1,100 200 0 1,300 5,300 -
Total 68,800 9,800 13,700 92,300 257,000
Winter planting
During the fall of 2011, Alpcot Agro planted about 42,000
hectares of winter wheat, of which 33,000 hectares were located in
the Russian inland, 6,000 hectares in the Ukraine and 3,000
hectares in Kaliningrad. Alpcot Agro has also planted in total
5,500 hectares of winter rape, of which 3,400 hectares are in the
Ukraine and 2,100 hectares are in Kaliningrad.
Spring planting plan update for 2012
In spring 2012, Alpcot Agro is planning to plant approximately
55,300 hectares of crops for sale, aiming for a total cropped area
in 2012 of 102,800 hectares. The main spring crops are envisaged to
be 15,100 hectares of sunflower, 10,000 hectares of soy, 9,900
hectares of barley, 8,800 hectares of corn, 4,000 hectares of
spring rape, 1,200 hectares of sugar beet and 6,300 hectares of
other crops.
Livestock operations
The most recent update on Alpcot Agro's livestock business was
released on 12 October 2011 and relates to the performance of the
livestock business during the quarter July - September 2011. During
Q3 2011, the average milk production on all of Alpcot Agro's farms
amounted to 36.2 tons per day, an increase by 1.7 percent from 35.6
tons per day in the previous quarter. The average production per
cow fell from 499 litres per month during Q2 to 480 litres per
month during Q3, which is a normal seasonal variation.
At 30 September 2011, the Company's livestock herd amounted to
6,320 animals, of which 2,290 milking cows, 3,270 heifers/dry cows
and 760 bulls and calves, compared to 2,170 milking cows, 3,160
heifers/dry cows and 770 bulls and calves at the end of the
previous quarter, in total an increase by about 220 cattle heads
during the quarter. Of the 800 heifers that were ordered in June,
so far 200 have been delivered from quarantine and the remainder
will be included in the herd during Q 4 2011.
11. Information on Alpcot Agro
Alpcot Agro was incorporated in 2006 by Alpcot Capital
Management Limited. Alpcot Agro's shares were listed on NASDAQ OMX
First North in Stockholm on 19 October 2009.
Alpcot Agro invests in farmland and associated agricultural
operations in Russia and Ukraine. Alpcot Agro aims to generate an
attractive return on invested capital by optimally utilizing its
agricultural land bank through crop production, dairy farming and
other similar operations. Alpcot Agro's operation comprises crop
production in Russia and Ukraine and dairy farming in Russia. As of
30 September 2011 Alpcot Agro controlled approximately 181,400
hectares of agricultural land in Russia and 18,800 hectares in
Ukraine. Of the Russian land bank 84,300 hectares are registered
land, 16,800 hectares are indirectly held land and 80,200 hectares
are leased. As at 30 September 2011, Alpcot Agro had approximately
1,300 employees in Russia and 100 employees in the Ukraine.
Historic Yields
Region Crop 2008 2009 2010 2011
Russian Inland Winter wheat 3.5 2.8 1.5 2.6
Sunflower 1.4 1.5 0.9 2.3(1)
Kaliningrad Winter wheat - - 4.5 3.0
Winter rape - - 2.3 2.1
Ukraine Winter wheat - 2.3 2.6 4.5
Corn - - 8.1 9.6(2)
Notes:
Yields represent tonnes harvested
(1.) 85 per cent. harvested
(2.) 82 per cent. harvested.
Alpcot Agro's strategy is to operate an efficient, modern
agricultural business according to international best practices.
Alpcot Agro's value chain has three parts: crop production, storage
and sales.
When Alpcot Agro gains control of farmland Alpcot Agro starts to
focus on improving the yields by increasing the use of modern
machinery, equipment and agricultural techniques. Alpcot Agro is
focused on creating mega clusters with own storage facility and
dairy farming in order to take advantage of economies of scale,
efficient management and benefits from synergies between crop
production and dairy farming. Alpcot Agro has set up mega clusters
within different geographical locations in order to reduce the
climate risk and weather exposure.
Access to storage capacity is an important element of Alpcot
Agro's value chain as it allows Alpcot Agro to sell its harvest
during the winter when the prices are usually higher than during
the harvesting period. Alpcot Agro is constantly improving its
central sales organisation and sees further potential in increasing
the sales revenues.
12. Directors, management and employees
Alpcot Agro has given assurances to the Landkom Board that, when
the Acquisition becomes effective, the existing employment rights,
including pension rights, of the management and employees of
Landkom will be fully safeguarded.
Alpcot Agro wishes to retain the best of Landkom's operating
management team to ensure that experience from past years is
retained in the business and to enable the best practices of both
businesses to be developed.
As referred to above, Landkom and Alpcot Agro are engaged in
complementary businesses that operate in similar jurisdictions and
the Acquisition is therefore likely to result in synergies and to
provide an opportunity to realise savings in costs and
expenses.
13. Disclosure of interests in Landkom
As at the close of business on 19 December 2011, being the
latest practicable date prior to the publication of this
announcement, Alpcot Agro owned or controlled no Landkom
Shares.
Save for the irrevocable undertakings referred to in paragraph 4
above, as at the close of business on 19 December 2011, being the
latest practicable date prior to the publication of this
announcement, none of Alpcot Agro or any of their directors or, so
far as the Alpcot Agro Directors are aware, any person acting, or
deemed to be acting, in concert with Alpcot Agro:
-- had an interest in, or right to subscribe for, relevant securities of Landkom;
-- had any short position in (whether conditional or absolute
and whether in the money or otherwise), including any short
position under a derivative, any agreement to sell or any delivery
obligation or right to require another person to purchase or take
delivery of, relevant securities of Landkom;
-- had procured an irrevocable commitment or letter of intent to
accept the Acquisition in respect of relevant securities of
Landkom; or
-- had borrowed or lent any Landkom Shares.
Furthermore, no arrangement exists with Alpcot Agro or Landkom
or an associate of Alpcot Agro or Landkom in relation to Landkom
Shares. For these purposes, an "arrangement" includes any indemnity
or option arrangement, any agreement or any understanding, formal
or informal, of whatever nature, relating to Landkom Shares which
may be an inducement to deal or refrain from dealing in such
securities.
14. Arrangements between Alpcot Agro and the Landkom Option Holders
Conditional upon the Scheme becoming Effective, Alpcot Agro
proposes to allow Landkom Option Holders who hold options over
Landkom Shares which are outstanding as at the date of this
Announcement (including options that are out of the money by
reference to the prevailing price of Landkom Shares and Alpcot Agro
Shares) to surrender their options in exchange for the allotment to
them of up to 686,316 Alpcot Agro Shares in aggregate representing
up to 3.49 per cent. of the New Alpcot Agro Shares being issued to
Landkom Shareholders in connection with the Acquisition and up to
0.57 per cent. of the enlarged issued share capital of Alpcot Agro
on the Effective Date (excluding the Placing Shares).
The holders of such Alpcot Agro Shares will be prevented from
selling, transferring or otherwise disposing of their New Alpcot
Agro Shares for a period of 12 months from the Effective Date
subject to certain customary carve outs. If a Landkom Option Holder
does not accept Alpcot Agro's proposal and does not exercise his
options within 30 days following the Acquisition, such options
shall lapse.
To the extent such option holders are unable to hold Alpcot Agro
Shares, Alpcot Agro will ensure that alternative arrangements are
put in place on equivalent terms.
Further details of the arrangements between Alpcot Agro and
Landkom Option Holders will be set out in the Scheme Document and
proposals to be sent to the Landkom Option Holders.
15. Implementation Agreement
On 19 December 2011, Landkom and Alpcot Agro entered into the
Implementation Agreement governing arrangements relating to the
Acquisition. The Implementation Agreement sets out, amongst other
things, various matters in relation to the implementation of the
Placing, the Amako Debt Agreement and the Acquisition, including an
undertaking from Landkom (subject to the fiduciary duties of the
Landkom Directors) not to solicit, initiate or encourage any
competing proposal to the Acquisition. In addition, Landkom has
agreed to notify Alpcot Agro immediately of any approach made to
Landkom in relation to a competing proposal which the Landkom
Directors believed is bona fide and superior to the terms of the
Acquisition.
16. Shareholder Meetings and Compulsory acquisition under Articles
There will be two Shareholder Meetings of Landkom in respect of
the Acquisition: (i) the Court Meeting and (ii) the Extraordinary
General Meeting.
The Court Meeting, which will be held immediately before the
Extraordinary General Meeting, is being held with the permission of
the Court. Its purpose is to seek the approval of Shareholders
(other than holders of Excluded Shares) for the Scheme. If a
majority in number of Landkom Shareholders representing at least
three quarters of the voting rights present at the Court Meeting
(either in person or by proxy) vote in favour of the Scheme, it
will, if sanctioned by the court, be binding on all Landkom
Shareholders, whether or not they were present or voted against the
Scheme.
The Extraordinary General Meeting is being called to enable
Shareholders to vote on the proposed changes to the Landkom
Articles to provide that, subject to the implementation of the
Scheme, any Landkom Shares issued after the Scheme Record Time
(other than to Alpcot Agro (or any of Alpcot Agro's subsidiaries)
or in either case its nominee(s)) will immediately be transferred
to Alpcot Agro in consideration of and conditional on the allotment
and issue or transfer to such person of such number of New Alpcot
Agro Shares and the payment of such cash consideration as that
person would have been entitled to under the Scheme for those
Landkom Shares had they been Scheme Shares and that any Landkom
Shares which are issued after the Extraordinary General Meeting but
before the Scheme Record Time will be subject to and bound by the
Scheme.
17. Expected Timetable
The expected timetable relating to the Acquisition is as
follows:
29 December 2011 despatch of Scheme Document and forms
of proxy
9 January 2012 Alpcot Agro Shareholder Meeting to
approve issue of New Alpcot Agro Shares
and the Placing Shares
23 January 2012 Landkom Court Meeting and Extraordinary
Shareholder Meeting to approve the
Scheme
25 January 2012 Court hearing to sanction Scheme
26 January 2012 Earliest possible Effective Date
18. Cancellation of trading on AIM
Dealings in Landkom Shares will be suspended at 8.00 a.m. on the
day before the Scheme Record Time (such suspension expected to be
on 24 January 2012). It is intended that the London Stock Exchange
will be requested to cancel trading in Landkom Shares on AIM on the
next Business Day following the Effective Date.
19. Overseas shareholders
This announcement does not constitute, or form part of, any
offer for, or any solicitation of any offer for, securities. Any
votes in favour of the Scheme or other response to the Acquisition
should be made only on the basis of information referred to in the
Scheme Document, which Alpcot Agro intends to despatch shortly to
Landkom Shareholders and, for information only, to participants in
the Landkom Share Schemes.
The availability of the Alpcot Agro Shares to persons who are
not resident in the United Kingdom may be affected by the laws of
their relevant jurisdiction. Such persons should inform themselves
of, and observe, any applicable legal or regulatory requirements of
their jurisdiction. Further details in relation to overseas
shareholders will be contained in the Scheme Document.
The Acquisition referred to in this Announcement will not
constitute an offer made, directly or indirectly, in, into or by
use of the mails of, or by any means or instrumentality (including,
without limitation, telephonically or electronically) of interstate
or foreign commerce of, or any facilities of a national securities
exchange of, the United States, Canada, Australia or Japan or any
other jurisdiction if to do so would constitute a violation of the
relevant laws of such jurisdiction. This Announcement does not
constitute an offer in the United States, Canada, Australia or
Japan or any such other jurisdiction and the Acquisition will not
be capable of acceptance by any such use, means, instrumentally or
facilities or otherwise from or within the United States, Canada,
Australia or Japan or any such other jurisdiction. Accordingly this
Announcement is not being, and should not be, mailed, transmitted
or otherwise distributed, in whole or in part, in or into or from
the United States, Canada, Australia or Japan or any such other
jurisdiction.
20. General
The Scheme Document will be posted to Landkom Shareholders as
soon as practicable and, in any event within 28 days of the date of
this announcement.
Landkom Shareholders (including, without limitation, nominees,
trustee or custodians) must not forward this Announcement to the
United States, Canada, Australia, Japan or any other such
jurisdiction.
This announcement does not constitute an offer or an invitation
to purchase any securities.
The Offer will be made solely by the Scheme Document which will
contain the full terms and conditions of the Acquisition, including
details of how to vote in favour of the Scheme.
Appendix III contains definitions of the terms used in this
announcement.
A copy of this announcement will be published on the following
websites: www.landkom.net and www.alpcotagro.com
PRESS ENQUIRIES
For further information contact:
Alpcot Agro
Bjorn Lindstrom Tel: +44 (0)79798 55556
Katre Saard Tel: +44 (0)79798 55557
Landkom
Neil Balfour Tel: +44 (0) 20 7726 2690
Liberum Capital
(Nominated Adviser and Broker to
Landkom)
Tim Graham Tel: +44 (0) 20 3100 2000
Simon Atkinson
College Hill
Adrian Duffield Tel: +44 (0) 20 7457 2020
Rozi Morris
Liberum Capital is acting exclusively for Landkom in connection
with the Acquisition and will not be responsible to any person
other than Landkom for providing the protections afforded to
clients of Liberum Capital or for providing advice in relation to
the Acquisition or any other matter referred to in this
announcement.
This Announcement is for information purposes only and does not
constitute, or form part of, any offer for, or any solicitation of
any offer for, securities. Any votes in favour of the Scheme or
other response to the Acquisition should be made only on the basis
of information referred to in the Scheme Document, which Alpcot
Agro intends to despatch shortly to Landkom Shareholders and, for
information only, to Landkom Option Holders.
The availability of the Alpcot Agro Shares to persons who are
not resident in the United Kingdom may be affected by the laws of
their relevant jurisdiction. Such persons should inform themselves
of, and observe, any applicable legal or regulatory requirements of
their jurisdiction. Further details in relation to overseas
shareholders will be contained in the Scheme Document.
The Acquisition referred to in this Announcement will not
constitute an offer made, directly or indirectly, in, into or by
use of the mails of, or by any means or instrumentality (including,
without limitation, telephonically or electronically) of interstate
or foreign commerce of, or any facilities of a national securities
exchange of, the United States, Canada, Australia or Japan or any
other jurisdiction if to do so would constitute a violation of the
relevant laws of such jurisdiction. This Announcement does not
constitute an offer in the United States, Canada, Australia or
Japan or any such other jurisdiction and the Acquisition will not
be capable of acceptance by any such use, means, instrumentally or
facilities or otherwise from or within the United States, Canada,
Australia or Japan or any such other jurisdiction. Accordingly this
Announcement is not being, and should not be, mailed, transmitted
or otherwise distributed, in whole or in part, in or into or from
the United States, Canada, Australia or Japan or any such other
jurisdiction.
Landkom Shareholders (including, without limitation, nominees,
trustee or custodians) must not forward this Announcement to the
United States, Canada, Australia, Japan or other such jurisdiction
where to do so would be unlawful.
The directors of Alpcot Agro accept responsibility for the
information contained in this announcement other than information
for which the Landkom Directors accept responsibility as set out
below. To the best of the knowledge and belief of the directors of
Alpcot Agro (who have taken all reasonable care to ensure that such
is the case), the information contained in this announcement for
which they accept responsibility is in accordance with the facts
and does not omit anything likely to affect the import of such
information.
The Landkom Directors (all of whose names will be set out in the
Scheme Document) accept responsibility for their recommendation of
the Acquisition contained in this announcement the information
relating to Landkom, the Landkom Group, and themselves and their
immediate families, related trusts and connected persons. To the
best of the knowledge and belief of the Landkom Directors (who have
taken all reasonable care to ensure that such is the case), such
information for which they are responsible is in accordance with
the facts and does not omit anything likely to affect the import of
such information.
IMPORTANT NOTICE
Due to the fact that Landkom is not managed and controlled in
the United Kingdom, the Channel Islands or the Isle of Man, the
Takeover Panel has confirmed to Landkom that the Acquisition is not
subject to the City Code on Takeovers and Mergers (the "Code").
Accordingly the disclosures in connection with the Acquisition are
not the same as those that apply under the Code such as there is no
requirement for the opening position disclosure or dealing
disclosures during the period of the Acquisition.
CAUTIONARY NOTICE REGARDING FORWARD LOOKING STATEMENTS
This Announcement contains certain forward looking statements
with respect to the financial condition, results of operations and
business of Landkom or Landkom Group and certain plans and
objectives of the boards of directors of Landkom and Alpcot Agro.
These forward looking statements can be identified by the fact that
they do not relate to historical or current facts. Forward looking
statements often use words such as "anticipate", "target",
"expect", "estimate", "intend", "plan", "goal", "believe", "will",
"may", "should", "would", "could" or other words of similar
meaning. These statements are based on assumptions and assessments
made by the boards of directors of Landkom and Alpcot Agro in the
light of their experience and their perception of historical
trends, current conditions, expected future developments and other
factors they believe appropriate. By their nature, forward looking
statements involve risk and uncertainty and the factors described
in the context of such forward looking statements in this
Announcement could cause actual results and developments to differ
materially from those expressed in or implied by such forward
looking statements.
APPENDIX I
Conditions and Certain Further Terms of the Acquisition
CONDITIONS TO THE ACQUISITION
1.1 The Acquisition will be conditional upon the Scheme becoming
Effective by not later than 1 April 2012 or such later date (if
any) as Alpcot Agro and Landkom may agree and (if required) the
Court may approve.
1.2 The Scheme will be subject to the following conditions:
1.2.1 its approval by a majority in number representing not less
than 75 per cent. in value of the Scheme Shareholders who are on
the register of members of Landkom at the Voting Record Time,
present and voting, whether in person or by proxy, at the Court
Meeting and any separate class meeting which may be required by the
Court or any adjournment thereof;
1.2.2 the Ordinary Resolution required to approve and implement
the Scheme being duly passed at the Extraordinary General Meeting
(or any adjournment thereof);
1.2.3 the sanction of the Scheme by the Court (with or without
modification (but subject to such modification being acceptable to
Alpcot Agro and Landkom)); and
1.2.4 a certified copy of the Court Order together with a copy
of the Scheme and all documents required to be annexed to the
Scheme (if any) being delivered to the Companies Registry within
seven days of the making of the Court Order.
1.3 The Scheme will also be conditional upon:
1.3.1 approval of the Acquisition from the Antimonopoly
Commission of the Ukraine in a form acceptable to Alpcot Agro;
1.3.2 since the Announcement Date, Landkom not having (i) made
any divestment, sale or disposal (ii) granted any option or right
of pre-emption, entered into any joint venture agreements or
strategic alliance or (iii) entered into any agreement to do the
same in respect of any of its undertakings, assets or a material
part of its business or operations located in the Ukraine;
1.3.3 the resolutions required to approve (i) the increase of
the authorised share capital of Alpcot Agro, (ii) the authority of
the Alpcot Agro Directors to allot and issue the New Alpcot Agro
Shares and the Placing Shares, (iii) the terms of the Acquisition
and (iv) the Placing being duly passed at the Alpcot Agro
Shareholder Meeting; and
1.3.4 the Placing becoming unconditional.
2. FURTHER TERMS OF THE SCHEME
2.1 Alpcot Agro reserves the right to waive the conditions set
out at paragraphs 1.3.1, 1.3.2 and (with the prior consent of the
Landkom Directors) the condition set out at paragraph 1.3.4
above.
2.2 Alpcot Agro reserves the right to elect to implement the
Acquisition by way of a takeover offer as an alternative to the
Scheme. In such event, the Acquisition will be implemented on the
same terms (subject to appropriate amendments) of the shares to
which the Acquisition relates and those required by, or deemed
appropriate by, Alpcot Agro under applicable law) as those which
would apply to the Scheme. Further, if sufficient acceptances of
such offer are received and/or sufficient Landkom Shares are
otherwise acquired, it is the intention of Alpcot Agro to apply the
provisions of the Companies Act to acquire compulsorily any
outstanding Landkom Shares to which such offer relates.
2.3 The Scheme is governed by Isle of Man law is subject to the
jurisdiction of the Isle of Man courts, and to the Conditions set
out in this Announcement and any dispute relating to the purported
invocation of any of the Conditions shall be determined by the Isle
of Man courts.
APPENDIX II
Bases and Sources
In this Announcement, unless otherwise stated or the context
otherwise requires, the following bases and sources have been
used:
Share Information
The share price of Landkom on a particular date is derived from
the Closing Price for that date.
The total number of ordinary shares in the capital of Landkom in
issue as at 19 December 2011, being the last practicable date prior
to the release of this announcement, is 435,008,935.
The share price of Alpcot Agro on a particular date is derived
from the Closing Price for that date.
The total number of Alpcot Agro shares in issue as at 19
December 2011, being the last practicable date prior to the release
of this announcement, is 99,197,472.
Exchange Rates
Save as referred to in Appendix IV, the following exchange rates
have been applied (using the closing exchange rates derived from
Reuters on 19 December 2011 being the last practicable date prior
to this announcement):
SEK 1 : GBP0.09312
GBP1 : SEK 10.7386
SEK 1 : US$0.1444
US$ 1 : SEK 6.9246
Information available on websites:
Certain information published or otherwise made available by
Landkom in connection with the recommended Scheme is available at:
www.landkom.net
Certain information published or otherwise made available by
Alpcot Agro in connection with the recommended Scheme is available
at: www.alpcot.com
APPENDIX III
Definitions
For the purposes of this Announcement the following expressions
have the following meaning:
Acquisition the acquisition by Alpcot Agro pursuant to the Scheme of the entire
issued and to be issued
share capital of Landkom;
Admission the admission of the New Alpcot Agro Shares to trading on NASDAQ
OMX First North becoming
effective;
AIM the AIM market operated by the London Stock Exchange;
Alpcot Agro Alpcot Agro AB, incorporated in Sweden with registered number
556710-3915;
Alpcot Agro Board or Alpcot Agro Directors the board of directors of Alpcot Agro;
Alpcot Agro Group Alpcot Agro and its subsidiaries;
Alpcot Agro Resolutions the resolutions required to be passed by the Alpcot Agro
Shareholders approving the Placing,
the Acquisition and the issue of the New Alpcot Agro Shares and the
Placing Shares;
Alpcot Agro Shareholder a holder of Alpcot Agro Shares;
Alpcot Agro Shares the ordinary shares of SEK 5.00 each in the capital of Alpcot Agro;
Alpcot Agro Shareholder Meeting the meeting of the Alpcot Agro Shareholders intended to be held on
9 January 2012 at 10.00
a.m. (CET);
Amako Amako Ukraine LLC with registered number (OKPO): 21665011 and
registered address 08322 Kyiv
region, Boryspil district, village Proliski, Brovarska Str, 2;
Amako Debt Agreement the agreement dated 20 December 2011 made between Amako and Alpcot
Agro pursuant to which
Alpcot Agro shall assume US$3 million of the indebtedness owed by
members of the Landkom Group
to Amako pursuant to promissory note and that repayment of such
indebtedness shall be satisfied
by the issue of the Placing Shares;
Announcement this announcement;
Announcement Date the date of this announcement;
Authorisations authorisations, orders, grants, recognitions, confirmations,
consents, licences, clearances,
certificates, permissions or approvals;
Business Day a day (other than a Saturday, Sunday, public or bank holiday) on
which banks are generally
open for business in London;
Closing Price the closing middle market price of a relevant share;
Companies Act or Act the Isle of Man Companies Act 2006 (as amended);
Companies Registry the Isle of Man Companies Registry;
Conditions the conditions to the implementation of the Acquisition and the
Scheme, which are set out
set out in Appendix I (Conditions and Further Terms) of this
Announcement;
Court the High Court of Justice of the Isle of Man;
Court Meeting the meeting of the holders of Landkom Shares (other than Excluded
Shares), intended to be
convened by the Court to approve the Scheme;
Court Order the order of the Court sanctioning the Scheme;
Effective the Scheme having become effective and unconditional pursuant to
its terms;
Effective Date the date on which the Scheme becomes Effective;
Enlarged Group the Alpcot Agro Group as enlarged by the acquisition of the Landkom
Group pursuant to the
terms of the Scheme
Excluded Shares any Shares of which any member of the Alpcot Agro Group or any
director of Alpcot Agro is
the holder or in which any member of the Alpcot Agro Group or any
director of Alpcot Agro
is beneficially interested;
Extraordinary General Meeting the extraordinary general meeting of the Shareholders in Landkom to
approve the resolution
to change the articles of association in relation to the Scheme;
FSA the UK Financial Services Authority;
FSMA the Financial Services and Markets Act 2000;
Landkom or the Company Landkom International plc, a company incorporated in the Isle of
Man with registered number
000737V;
Landkom Articles the articles of association of Landkom;
Landkom Board or Landkom Directors the board of directors of Landkom;
Landkom Group Landkom and each of its subsidiaries from time to time;
Landkom Option Holder holders of options over Landkom Shares;
Landkom Shareholders Shareholders other than the holders of Excluded Shares;
Ordinary shares of 0.1pence each in the capital of Landkom;
Landkom Shares
Investment Manager Alpcot Capital Management Limited, a wholly owned subsidiary of
Mustique Capital Holding S.A.
and authorised by the Financial Services Authority in the United
Kingdom;
Liberum Capital Liberum Capital Limited, financial adviser to Landkom;
London Stock Exchange London Stock Exchange plc or its successor;
Management Agreement management agreement between Alpcot Agro and the Investment Manager
stipulating the Investment
Manager's assignments, obligations and compensation;
NASDAQ Admission Standards the rules issued by NASDAQ OMX in relation to the admission to
trading of, and continuing
requirements for, securities admitted to trading on the NASDAQ OMX
First North market;
NASDAQ OMX NASDAQ OMX Group, Inc.;
NASDAQ OMX First North or First North the market by name operated by NASDAQ OMX in Stockholm, Sweden;
New Alpcot Agro Shares the new Alpcot Agro Shares to be issued pursuant to the terms of
the Acquisition;
Overseas Shareholder a holder of Scheme Shares with a registered address outside the
Isle of Man or the United
Kingdom whom Alpcot Agro reasonably believes to be located in or a
citizen, resident or national
of a jurisdiction outside the Isle of Man or United Kingdom;
pence and GBP the lawful currency of the UK;
Placing the placing of the Placing Shares with investors by Pareto Ohman;
Placing Shares the new Alpcot Agro Shares to be issued pursuant to the Placing;
Raiffeissen Raiffeissen Bank Aval;
register the statutory register of members of Alpcot Agro or Landkom, as
applicable;
Resolutions the resolutions proposed to be passed at the Court Meeting and the
Extraordinary General Meeting;
Restricted Jurisdiction any jurisdiction where any action to be taken or which may be taken
in relation to the Acquisition
and/or the Scheme would constitute a violation of the relevant laws
and regulations of such
jurisdiction or would result in a requirement to comply with any
governmental or other consent
or any registration, filing or other formality which Alpcot Agro
and Landkom regard as unduly
onerous;
Scheme the Scheme of Arrangement to be proposed in the Scheme Document;
Scheme Document the document to be sent to Landkom Shareholders setting out the
full terms of the Acquisition
and the Scheme;
Scheme Record Time 6.00 p.m. on the Business Day immediately prior to the Effective
Date;
Scheme Shareholders the holders of Scheme Shares;
Scheme Shares (a) the Landkom Shares in issue at the date of the Scheme;
(b) any Landkom Shares issued after the date of the Scheme and
before the Voting Record Time;
and
(c) any Landkom Shares issued at or after the Voting Record Time
and before the Scheme Record
Time in respect of which the original or any subsequent holders
thereof are, or shall have
agreed in writing to be, bound by the Scheme
in each case excluding the Excluded Shares;
SEC the US Securities and Exchange Commission;
SEK Swedish Krona, the lawful currency of the Kingdom of Sweden;
Shareholder or Landkom Shareholder a holder of Landkom Shares;
Shareholder Meetings the Court Meeting and the Extraordinary General Meeting;
UK or United Kingdom the United Kingdom of Great Britain and Northern Ireland;
US or United States or United States of America the United States of America, its territories and possessions, any
State of the United States
and the District of Columbia;
US Persons a US person as defined in Regulation S under the US Securities Act;
US Securities Act the US Securities Act of 1933, as amended, and the rules and
regulations made thereunder;
Voting Record Time 6.00 p.m. on the day which is two days before the date of the Court
Meeting or, if the Court
Meeting is adjourned, 6.00 p.m. on the day which is two days before
the date of such adjourned
meeting;
Wider Alpcot Agro Group Alpcot Agro Group and associated undertakings and any other body
corporate, partnership, joint
venture or person in which Alpcot Agro and such undertakings
(aggregating their interests)
have an interest of more than 20 per cent. of the voting or equity
capital or the equivalent;
Wider Landkom Group Landkom and associated undertakings and any other body corporate,
partnership, joint venture
or person in which Landkom and such undertakings (aggregating their
interests) have an interest
of more than 20 per cent. of the voting or equity capital or the
equivalent.
APPENDIX IV
PRO FORMA BALANCE SHEET FOR ENLARGED GROUP
The unauditedpro forma historical balance sheet set out below
hasbeen prepared by Alpcot Agro based on the balance sheets of
Alpcot Agro and Landkom as at 30 June 2011. The pro forma
information is provided for illustration purposes only to show the
relative sizes of Alpcot Agro and Landkom following the impact of
the issue of New Alpcot Agro shares in connection with the
Acquisition and the proposed Placing. It is neither intended to be
an indication of the actual financial position had the Acquisition
taken place on 30 June 2011 nor a prediction of the future
financial position of the Enlarged Group.
USD thousands 30/06/2011 30/06/2011 Combined incl.
Alpcot Agro Landkom Share issue
PP&E 93,895 33,297 116,093
-------------------------- ------------------------ ------------------------
Land in process of registration 10,799 10,799
-------------------------- ------------------------ ------------------------
Intangible fixed assets 4,799 151 4,950
-------------------------- ------------------------ ------------------------
Non-current bio assets 7,112 460 7,572
-------------------------- ------------------------ ------------------------
Other non-current assets 8,087 8,087
-------------------------- ------------------------ ------------------------
Current bio assets 37,904 32,727 70,631
-------------------------- ------------------------ ------------------------
Inventories 9,661 5,076 14,737
-------------------------- ------------------------ ------------------------
Trade receivables 22,902 6,317 29,219
-------------------------- ------------------------ ------------------------
Cash 27, 744 917 48, 661
-------------------------- ------------------------ ------------------------
Asset held for sale 975 975
-------------------------- ------------------------ ------------------------
Total assets 223,879 78,945 311,725
-------------------------- ------------------------ ------------------------
Share capital 71,693 789 100,449
-------------------------- ------------------------ ------------------------
Share premium 200,896 159,350 212,974
-------------------------- ------------------------ ------------------------
Reserves (21,931) (5,349) (21,931)
-------------------------- ------------------------ ------------------------
Retained earnings (75,104) (108,343) (60,750)
-------------------------- ------------------------ ------------------------
Non-controlling interests 194 (161) 194
-------------------------- ------------------------ ------------------------
Interest bearing loans 27,883 15,112 42,995
-------------------------- ------------------------ ------------------------
Trade payables 17,926 17,297 35,223
-------------------------- ------------------------ ------------------------
Other liabilities 2,321 250 2,571
-------------------------- ------------------------ ------------------------
Equity and liabilities 223,879 78,945 311,725
-------------------------- ------------------------ ------------------------
Key Ratios
Alpcot Agro Landkom Combined
Issued shares 99,197,472 435,008,935 138,985,359
---------------------- ------------------- ------------------
Equity per share, USD 1.77 0.11 1.66
---------------------- ------------------- ------------------
Volume weighted average
share price for last 20
trading days, USD 1.03 0.05 1.03
---------------------- ------------------- ------------------
P/B ratio 0.58 0.46 0.62
---------------------- ------------------- ------------------
Mark Cap, USD thousands 101,804 21,320 142,638
---------------------- ------------------- ------------------
Operating working cap,
% of assets 36% 35% 41%
---------------------- ------------------- ------------------
Equity ratio 79% 59% 74%
---------------------- ------------------- ------------------
Interest bearing debt/equity 16% 33% 19%
---------------------- ------------------- ------------------
This pro forma has not been audited and has been prepared on the
basis of the following assumptions:
-- Information extracted from balance sheets of Alpcot Agro and
Landkom as at 30 June 2011
-- Alpcot Agro figures are taken from the 30 June 2011 unaudited interim report
-- Landkom figures are estimates based on unaudited management accounts
-- A total of 19,487,887 new Alpcot Agro shares are issued at a
price of SEK 7.10 in the Placing
-- A total of 20.3 million New Alpcot Agro shares are issued as
consideration for the Acquisition and valued at SEK 7.10 per
share
-- Write down of PP&E of Landkom amounting to USD 11 million
upon completion of Acquisition
-- Negative goodwill on Acquisition credited directly to reserves.
APPENDIX V
Total Production Cost per tonne - Sensitivity Analysis
Russia - Winter Wheat (production cost)
Total
cost
per ha Gross yield
2.5 2.75 3 3.25 3.5 3.75 4
350 156 141 130 120 111 104 97
400 178 162 148 137 127 119 111
----- ----- -----
450 200 182 167 154 143 133 125
----- ----- -----
500 222 202 185 171 159 148 139
550 244 222 204 188 175 163 153
Russia - Sunflower (production cost)
Total
cost
per ha Gross yield
1.3 1.5 1.75 2 2.25 2.5 2.75
----- ----- -----
400 356 296 254 222 198 178 162
----- ----- -----
450 400 333 286 250 222 200 182
500 444 370 317 278 247 222 202
550 489 407 349 306 272 244 222
600 533 444 381 333 296 267 242
Ukraine - Winter wheat (production cost)
Total
cost
per ha Gross yield
4 4.5 5 5.5 6 6.5 7
----- ----- -----
775 215 191 172 157 144 132 123
----- ----- -----
800 222 198 178 162 148 137 127
825 229 204 183 167 153 141 131
850 236 210 189 172 157 145 135
875 243 216 194 177 162 150 139
900 250 222 200 182 167 154 143
Ukraine - Corn (production cost)
Total
cost
per ha Gross yield
6 7 8 9 10 11 12
950 176 151 132 117 106 96 88
----- ----- -----
1,000 185 159 139 123 111 101 93
----- ----- -----
1,050 194 167 146 130 117 106 97
1,100 204 175 153 136 122 111 102
1,150 213 183 160 142 128 116 106
Notes:
1. All amounts in USD.
2. The actual net yield per hectare is estimated at
approximately 90 per cent. of the corresponding gross yield.
3. Expected total production cost per tonne following reduction
of indirect costs of USD$ 115 per ha in the Enlarged Group
This information is provided by RNS
The company news service from the London Stock Exchange
END
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