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Banks promise continued finance to Agribusiness IKR

Hungarian agribusiness IKR is expected to continue operations after it received written promise from its creditor banks that they will carry on financing the company, CEO Attila Szaxon said in Budapest on Wednesday.

On Wednesday Raiffeisen Bank withdrew a liquidation request it had filed against IKR early July. The early July move had prevented the signing of an agreement with the banks.

The CEO told MTI on Wednesday that the company had closed last year with losses of around HUF 2.4 billion compared to profits of almost HUF 100 million in the previous year.

The CEO attributed the losses to damages of HUF 1.5 billion suffered through rape seed purchases and a treasury banking facility concluded with one of the banks, as a result of which the company had losses of HUF 3.8 billion.

The CEO said IKR needs an annual loan stock of around HUF 30 billion to finance the company. If IKR receives this, it will have revenue of HUF 50 billion-60 billion this year compared to HUF 94 billion last year. In 2008, revenue exceeded HUF 100 billion, the CEO said.

He also noted that if the company's financing is in order, producers will not be affected at all by the company's problems.

IKR is expected to involve a new investor into its operation, with talks scheduled to be closed in August. These will result in a HUF 3 billion capital raise, a further condition to bank loans.

The CEO said the company would be best off if the capital raise was carried out by the Czech-registered company Agrofert because this company owns the Slovak fertilizer maker Duslo, which IKR has had a long-standing partnership with.

Econews reported on Tuesday that IKR would decide on Wednesday whether to file for bankruptcy protection.

IKR controls 14% of Hungary's planting seed market, 15% of the pesticide and herbicide market and one-third of the market for artificial fertilizer. It has 30-35% of the market for farm machinery. (MTI-ECONEWS)