Russia's largest producer of animal feed, the agricultural holding Sodruzestvo has recently demanded the bankruptcy of Optifood, one of the largest poultry producers in the country.
The reason is the huge financial debt that Optifood currently has to various creditors.
Overall since the beginning of the year 45 lawsuits have been filed to various structures of Optifood in different regions of the country, including four demanding the poultry producer to declare bankruptcy.
The representatives of Optifood blamed the Russian Agricultural Bank, which recently suspended its lending.
According to Optifood spokesman Nicholas Vozvyshaeva a tripartite agreement granting state funds of 1.6 billion rubles (US$ 53 mln) was signed in September 2009 between the Agricultural Bank, the Ministry of Finance of Russia and Optifood.
In addition the bank credited the compnay in the amount of 3.45 billion rubles (US$ 115). However, the interest rate for a loan has been extremely high, which has had a negative impact on the financial condition of agricultural holdings and led to the washout of working capital – reported the representatives of the company.
In April, the Agricultural Bank increased its lending limit under a new credit agreement but to date the loan is issued only in part. As a result, the company could stop the production process already in coming weeks.
To bring the business out of the crisis and fully recover, 1.5 billion rubles (US$ 50 mln) of government subsidising, with a grace period for the payment of interest, is needed.
Optifood are currently among the ten largest poultry producers in Russia with an annual production of about 100,000 tonnes of poultry.
Source: Argentine Beef Packers S.A.
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