NATALIA SHAGAIDA: “RDIF IS UNLIKELY TO BECOME AN INVESTOR WILLING TO DEVELOP THE COMPANY”

The core owner of Rusagro Group (one of Russia’s biggest agricultural holding companies), ex-senator Vadim Moshkovich plans to sell part of his stake via a secondary public offering (SPO). Natalia Shagaida, Head of the Gaidar Institute’s Agrarian Department, in a commentary to Agroinvestor.ru dispelled the myth that the Russian Direct Investment Fund (RDIF) could actually become an anchor investor capable of developing the company.

The total value of the stake put up for sale, less the traditional discount to market quotations for SPO transactions, may amount to about $ 275 million, an equivalent of approximately 13.4% of the company’s capital.

Natalia Shagaida believes that the RDIF is unlikely to become an investor eager to develop the company. “Rather, it will wait for dividends or a better time to sell its stake at a profit,” the expert said. According to her estimation, the sale of part of a stake generates benefits or losses (depending on previous investments) for the business owner, and it can change the balance of power within the company. “The upshot could be that the new owner may have better incentives for some new inputs in the company’s development, for attracting investments”, Natalia Shagaida explained. In her opinion, sometimes it is the person to whom the company owes a debt that becomes its new owner, and in such a case the holding company gains a benefit.