Black Earth Farming to liquidate operations

Black Earth Farming to liquidate operations

Black Earth Farming, the high-profile investor controlled farming group, has announced plans to sell its Russian operations and liquidate the company altogether. Black Earth says it has reached agreement to sell its farming assets for $184m (€173m) to Volgo-DonSelkhozInvest, a Russian-owned company that farms almost 250,000ha of land in the Volgograd area of western Russia.

Established in 2005, Black Earth Farming controls close to 245,000ha (605,400ac) of agricultural land in Russia, which is an area slightly bigger than Co Meath. About 150,000ha of this is planted annually in crops such as wheat, maize, barley, sunflower oilseeds and potatoes.

Black Earth plans to use the sale of these assets to wind up the company in the coming months. It will then have between $185m and $193m (€174m-€182m) to redistribute to shareholders.

Management says this return to shareholders will represent a premium of between 96% and 105% on the company’s share price last August. Since August, shares in Black Earth have increased over 90% amid speculation the group was in talks to purchase a major landholding in central Russia. However, this deal has not happened and Black Earth management says selling the business represents the best return for shareholders.

Listed on the stock exchange in Stockholm, Black Earth has racked up accumulated pre-tax losses of $196m (€185m) over the last decade, although it had returned a $17m profit in its latest financial year.