TKS Union AG
TKS Union AG issues corporate bond to fund investments in the highly promising agricultural market
TKS Union AG / Key word(s): Bond/Issue of Debt CORPORATE NEWS Hamburg, 9 October 2013 – Hamburg-based TKS Union AG focuses on capitalising on the opportunities offered by the agricultural sector in the world’s geographically largest country. The Russian Sojuz Group is co-owned by Tönnies Russland Agrar GmbH (65 %) and TKS Union AG (35 %). Since 2007 this Group has built up an integrated business model ranging from grain farming and fodder production to pig breeding and meat marketing in the undersupplied Russian market. Today Sojuz is active at two locations (Belgorod and Voronezh) in the fertile Chernozem region some 600 kilometres to the south of Moscow. The Group currently farms 45,000 hectares and produces 650,000 pigs per year. Employing 1,000 people, Sojuz reported total output of EUR 96.9 million and EBIT of EUR 22.1 million for 2012. Net profit amounted to EUR 11.4 million. Profitable growth strategy supported by international standards of quality ‘Since 2007 we have invested some EUR 280 million in state-of-the-art plant and equipment, enabling us to work to the highest international standards of quality,’ says Georg Reese, member of the Management Board of TKS Union AG. ‘Today we have established ourselves as a high quality supplier and are ranked among the top 10 Russian meat producers. This means that the foundations for sustained profitable growth are already in place.’ To strengthen the financial basis for the profitable growth strategy in the coming years, the company will open the subscription period for TKS Union AG’s corporate bond with a volume of up to EUR 50 million. A term of five years and a fixed interest rate of 8.625% p.a. makes the corporate bond (DE000A1X3Q40 / A1X3Q4) an interesting investment for asset managers, institutional and private investors alike. The subscription period will run from 22 October until 4 November unless terminated early. German investors can subscribe the bond directly via the TKS website www.tks-union.ag or through their respective portfolio manager at the Frankfurt Stock Exchange. Growing demand for meat is unmet already today ‘As a farm manager, KTG Agrar has been instrumental in building the Sojuz Group already since 2008. This is why I am convinced of the long-term opportunities in the Russian agricultural market,’ says Siegfried Hofreiter, Chairman of the Supervisory Board of TKS Union AG and CEO of KTG Agrar AG. ‘On the one hand, Russia offers highly fertile fields – which can be bought at what are very favourable prices in international comparison – and sufficient space to breed livestock to the highest international standards. On the other hand, today’s domestic supply covers only two thirds of the growing demand for pork.’ KTG Agrar AG, one of western Europe’s leading agricultural companies, holds a 50 percent stake in TKS Union AG. The remaining 50 percent are held by RKS Agrarbeteiligungs GmbH. Together with Tönnies Russland Agrar GmbH, the three owners have comprehensive expertise along the Sojuz Group’s value chain. ‘We form a powerful team and have built an outstanding integrated agribusiness. Now investors have the opportunity to benefit from what we have built.’ Target for 2017: EUR 300 million in total output and disproportionate EBIT growth The coming years will see the Sojuz Group push ahead its profitable business model in the undersupplied Russian pork market. For one thing, modern pig sheds for 1.5 million pigs per year are to be built by 2017. To ensure a reliable supply of high-quality fodder, the crop fields are to be expanded to 60,000 hectares (including some 20,000 hectares of owned land) during the same period. Says Georg Reese: ‘Based on these expansion targets, raising our total output to EUR 300 million by 2017 is a realistic goal.’ The good margin is to be further improved as well. The Group’s own mixed fodder factory with a capacity of 240,000 tons per year, which is due to be completed already in November of this year, will contribute to this objective. Facts & figures of the TKS Union Bond About TKS Union AG Contact End of Corporate News 09.10.2013 Dissemination of a Corporate News, transmitted by DGAP – a company of EQS Group AG. The issuer is solely responsible for the content of this announcement. DGAP’s Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de |
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