Racova Grup, the agribusiness owned by Adrian Porumboiu, a well known ex-footballer and businessman in Romania, is looking for investors as part of a restructuring to reduce the company’s debt burden and provide some growth capital.
One of Romania’s largest agribusinesses, Racova farms over 46,000 hectares of cropping and grazing land and operates a range of grain storage and processing assets for the production of milk, vegetable oil, baked goods, wine and biodiesel.
After taking on a lot of bank debt over its 20 years history, the company wants to switch financial partners and attract $10 million in investment from third parties, according to Ciprian Filip, managing director at Fundshing, an investment management and advisory firm acting as a placement agent to Racova.
The investment can come in the form of debt or equity, according to Filip. The company posted $170 million in revenues last year, with some $103 million in bank debt and net profit of $7 million, according to a factsheet seen by Agri Investor. But the company’s storage facilities present a particular opportunity to generate capital if wheat, grown on its own land, or purchased from elsewhere, is stored for six months and prices rise, according to Filip. “This is the opportunity,” he said.
The company has some 284,ooo tons of grain storage space and has plans to increase this capacity further. It also wants to invest in irrigation systems and the modernisation of its processing assets.
Racova did put its grain subsidiary, R-Agro, up for sale last year for €32.5 million but it is understood that the deal did not go ahead, and the company raised capital through the sale of some of R-Agro’s 5,586 hectares of farmland instead.