UPDATE 1-Russian farming group Rusagro bets on sugar as prices rise

lunes 23 de noviembre de 2015 13:39 GYT

(Adds CEO comments on Razgulay deal, sugar prices)

By Maria Kiselyova

MOSCOW Nov 23 (Reuters) - Russian farming conglomerate Rusagro said it plans to sign a deal this week to buy the debt and some equity of rival Razgulay as part of a plan to expand its sugar business at a time of rising prices.

Raw sugar futures are trading near a 10-month high thanks to lower-than-expected output in No. 2 grower India and as rains hampered the cane crush in Brazil's main region, fuelling prices on the import-dependent Russian market.

Rusagro had earlier agreed with Razgulay's creditor VEB to take over around 34 billion roubles ($519 million) worth of debt and 20 percent of shares of the indebted sugar and grain producer.

Detailing the plan, Maxim Basov, Rusagro chief executive officer, said on Monday Rusagro expected to get a 34 billion rouble, 13-year loan from VEB at "a very low interest rate" this week to fund the acquisition.

Later on, Rusagro expects Razgulay to put its assets up for sale through auctions in which Rusagro plans to bid for several sugar mills and agricultural land, Basov added.

"One scenario - we will get a lot of cash but won't buy assets, the other scenario - we will get assets and cash... We hope that we will be able to buy the assets ... in the first half of next year," he told analysts on a conference call.

He said next year's capital expenditures would likely rise to around 15 billion roubles from 10 billion roubles in 2015 partly because Rusagro planned to invest in the Razgulay mills which he said were "very under-invested."   Continuación...