Vnesheconombank and the Eurodon Group of Companies have agreed on the main terms and conditions of a deal to restructure the Group’s debt to the Bank. According to the documents signed, VEB will extend the maturity dates of the loans given by the Bank to the Group companies, and make available an extra RUB2.6 billion. The parties believe these solutions will steer the turkey-producing enterprises out of crisis, and enable them to achieve the design production capacity.
Under the terms of the deal, the VEB Group is to hold a controlling stake in the company until the principal debt to Vnesheconombank has been repaid. The control over the Eurodon Group operations will remain with Vadim Vaneev, General Director and co-owner.
“Our common task is to restore and increase the project capitalization. In the current situation, extra funding will help Eurodon keep the production facilities, raise the turkey meat output, and regain its leadership position in the industry,” said Sergey Gorkov, Vnesheconombank Chairman.
The VEB Chairman pointed out that the Bank does not seek to keep its control over the company in future. The transfer of the controlling stake is a temporary measure to be introduced until the loan repayment schedule is met. Furthermore, Vadim Vaneev has a priority right to buy out the shares from the VEB Group.
“Obviously, we won’t be able to achieve the output targets this year. However, Eurodon has the modern production facilities other producers are only planning to build. In 2018, we intend to produce over 100 thousand tons of turkey meat with a further increase in future”
At present, VEB is participating in Eurodon investment projects to produce turkey meat in the Rostov region with a total output of 127 thousand tons a year. For 10 years, VEB has been the sole creditor of the Eurodon Group of Companies, whose joint debt to the Bank amounts to RUB30.7 billion.
The Eurodon company was established in 2003. Since 2006, it has been a supplier of the Indolina dietary turkey meat in the domestic market. Since 2015, Eurodon has been operating a new meat processing factory with an annual production capacity of 150 thousand tons of turkey meat. An agricultural cluster in the Oktyabrsky district of the Rostov region produces 12 million turkeys a year. In 2016, the Group produced 74.5 thousand tons of turkey meat. Using the agricultural cluster production facilities, the company is capable of producing up to 150 thousand tons of turkey meat.