Razgulay Advances as Vnesheconombank Boosts Stake: Moscow MoverIlya Khrennikov
OAO Razgulay Group rose to its highest level in five trading sessions after the state development bank agreed to boost its stake in the Russian grain and sugar producer.
Razgulay advanced as much as 7.1 percent to 14.40 rubles a share before settling at 13.94 rubles by the 6:45 p.m. close of the main trading session in Moscow. That’s the highest close since Dec. 25. The Moscow Exchange resumed trading yesterday after halting for the New Year’s break on Dec. 28.
Vnesheconombank converted 1.11 billion rubles ($36 million) of debt into shares, increasing its holding in Razgulay to 19.97 percent, the agricultural producer said in an e-mailed statement today. The stock fell 45 percent last year as the company sought to sell assets and reduce debt.
“VEB’s support signals that Razgulay won’t go bankrupt,” Mikhail Loshinin, an analyst at Rye Man & Gor Securities in Moscow, said by phone. The state bank holds most of Razgulay’s 25 billion-ruble debt, he said.
The agricultural holding will be able to invest in strategic areas of the business now that debt servicing has been reduced, Rustem Mirgalimov, Razgulay’s board chairman, said in the statement.