Kernel Boosting Investments by Enlarged Credit Line

6 Сен

The agro-industrial company Kernel (Ukraine) has agreed with a syndicate of European banks to prolong its credit line at $290M for one year. According to the Group’s report at the Warsaw Stock Exchange site on Wednesday 03 September 2019, they signed the agreement to change and review their pre-export credit line by 16 October 2017. In particular, the terms of the existing instalments were extended for one year: on $200M – till 31 August 2022, on $90M – till 31 August 2020.

Moreover, the total available limit over this credit line was enlarged up to $390M by an additional instalment of $100M due to be repaid by 31 August 2021.

At the same time Press Office of Ukrainian Sea Ports Authority (USPA) has reported that the latter signed on Thursday with Kernel an agreement on collaboration stipulating investments in the seaport Chornomorsk infrastructure development amounting to more than 3Bn UAH. The arrangements embrace dredging at Berths 14, 15, 16, 17, and erection of a new grain complex under LLC TransGrainTerminal. The investments on USPA part are going to amount to almost 230M UAH, while on the private investor’s part – some 3Bn UAH.

According to the document, USPA undertakes to carry out by the end of 2020 reconstruction of the Sukhoi Liman operational harbourage first basin down to 15 m and secure the bottom deepening along the borders of Berths 14-17 line where the Kernel Holding SA company’s terminals operate. The depths of the operational harbourage by the quays are planned to reach 14-15 m.

Kernel has undertaken to erect a new grain complex of LLC TransGrainTerminal in 2019-2020. This is going to enable handling annually agro cargoes at the level not less than 6M t starting from 2021, and in the prospect to reach up to 7M t of annual handling.

“The agreement between USPA and Kernel is a good example of public-private partnership and a next step of the port Chornomorsk system development dealt with by USPA. This year we have accomplished a large-scale project on capital dredging at the port’s access channel and the Sukhoi Liman’s first basin harbourage, at once moving to the next step i.e. creation of the depths required by the business at Berths 14-17. The company Kernel on their turn has taken obligation to secure the cargo flow at least 6M t a year. This would favour the USPA capital investments’ fast return”, noted Acting Head of USPA Raivis Veckagans.

“Our strategic goal by 2020 is to boost the grain export up to 8.8M t on account of launching the new terminal in Chornomorsk Port. That’s why we are now maximally focused on the construction of TransGrainTerminal. The next step is to focus on its efficient load. At the same time such large-scale investment projects’ realisation is impossible without the state support. Today we perceive the support on the part of USPA, who assist us to reach strategic goals of both the state and the business by their technical decisions”, declared Kernel’s DG Ievhen Osipov.

As Mr Veckagans observed, the project’s implementation will foster enhancement of the Ukrainian companies’ products export conditions, increase of ships calls, and creation of 250 more jobs in the port.

In April 2017 USPA and Kernel signed a memorandum of cooperation by which USPA undertook to magnify depths of the Sukhoi Liman’s first basin operational harbourage and those at Berths 14-17 and in the port’s access channel, while Kernel – to augment the port handling by 3M t i.e. up to 7M t by the second half of 2019.

Now Kernel go on building the TransGrainTerminal with 4M t annual capacity. The first phase had been planned to be launched in January 2019.

Kernel is a world largest manufacturer and exporter of sunflower oil, major manufacturer and supplier of agro products from the Black Sea region to global markets. The company’s vertically integrated structure is aligned of closely interrelated business segments: production, export and domestic sales of sunflower oil; plant cultivation; export of grains; providing services of grain storage and transhipment at elevators and port terminals. The company’s land bank amounts to 550,000 ha, its production is delivered to over 60 countries.

Kernel’s stock is rated at Warsaw Stock Exchange since November 2007. In 2019 Financial Year (July 2018 – June 2019) the company multiplied its grain sales 2.2 times comparing to the previous FY – up to 10.445M t, the sunflower oil sales grew by 15% – up to 1.6M t, grain export from Ukraine – by 58% i.e. up to 4.6M t.