The largest exporter of grain in Russia became an agricultural holding

Trading House «RIF» became the owner of the grain producer CJSC «YugAgroHolding», having closed its debt obligations to the Moscow Industrial Bank.

Trading House RIF is the largest exporter of grain in the country, having shipped 4.8 million tons of grain from July 2019 to April 2020 and taking the first line in the exporter rating, according to the analytical center of JSC Rusagrotrans.

The company has been working with ZAO YugAgroHolding for a long time, helping him financially in sowing and harvesting for several years.

Part of the invested funds was returned from the harvest, and the rest remained the debt of YugAgroHolding CJSC to the RIF Trading House.

Outdated technologies and accounting methods of YugAgroHolding CJSC increased its losses and debts to other creditors, including the Moscow Industrial Bank, every year.

So, for example, the revenue of CJSC YugAgroHolding for 2019 amounted to 471 million rubles, and the loss — 676.2 million rubles.

The total debt to the bank amounted to 1.08 billion rubles, and at the end of 2019, the bank filed a lawsuit to declare it bankrupt.

According to Roman Saas, former general director and co-owner of YugAgroHolding CJSC, debts to creditors did not allow the company to use other financial instruments and develop further.

After searching for different options, an agreement was concluded with the RIF Trading House, according to which the trading house closed the debt to the bank. And now an option agreement is being prepared for signing, within the framework of its shares the holding will be transferred to RIF Trading House.

Accordingly, YugAgroHolding CJSC has the opportunity to redeem the debt within two years. If this does not happen, the RIF Trading House will remain the owner of the enterprise.

Initially, the grain trader planned to restore order in the holding and resell it, but then decided to develop it independently. This will be the first agricultural experience of RIF Trading House, previously the company was engaged only in trading.

The volume of the land bank of CJSC YugAgroHolding is about 30 thousand hectares in Veselovsky, Tarasovsky and Kuibyshevsky districts.

This is a good volume, which allows us to speak of RIF Trading House not only as a trader, but also as an agricultural holding.

In addition, with this transaction, the exporter is diversifying his business, and with proper management, in the south, you can get a good profitability of the land bank.

It should also be noted that the transaction took place in a not very favorable period for RIF Trading House: revenue in 2019 amounted to 74.2 billion rubles, which is 38% less than in the previous year. Profit decreased by 29% — to 461.6 million rubles (which did not prevent the company from remaining among the leaders in the grain market).

A large share of the market is now being taken over by VTB Bank, which occupies more and more weighty positions: at the end of 2019, the bank acquired 50% minus 1 share of United Grain Company JSC (UGC), which, in turn, owns 51% of PJSC Novorossiysk Kombinat grain products ”, including 3 elevators and a complex of port facilities.


At the same time, the bank bought out from the Novorossiysk sea trade port the Novorossiysk sea terminal — the largest in the country.

In the same year, VTB Bank acquired 70% of the capital of Mirogroup Resources LLC, a major distributor in the grain and oilseeds market.

And at RIFA Trade House, shipments from the Black Sea terminals have decreased by about 10 times to 58 thousand tons.

The arrival of large and financially capacious companies on the market encourages the existing players to enlarge their business in order to remain competitive.

With the acquisition of RIF Trading House of YugAgroHolding CJSC, the company plans to further strengthen its position in the Russian market.

This is a trend in recent years — large holdings are showing interest in buying land in southern Russia amid growing grain exports.

In addition, over the past two years, RIFA Trade House has been investing a large amount of funds in logistics, relying on the railways: two major leasing deals were concluded with hopper cars with Sberbank Leasing JSC, receiving a total of 700 cars for the amount of 3.8 billion rubles.

And in 2019, the company entered the RBC 500 rating as the largest company from the Rostov region in terms of revenue.