Don Agro, based in Russia, will provide external legal advice on the implication of the sanctions

SINGAPORE (THE BUSINESS TIMES) – Russian-based, Singapore-listed agricultural company Don Agro International said it was working closely with its external sanctions counsel to obtain legal advice on the implications of the latest sanctions. and the current geopolitical situation.

Responding to questions from the Singapore Stock Exchange (SGX) on Friday evening (March 4), Don Agro said he would provide an update announcement “as soon as possible” once the opinion of the external sanctions lawyer is obtained. .

Don Agro – which is engaged in the cultivation of agricultural crops and the production of raw milk in Russia – had also provided its own confirmation regarding compliance with sanctions arising from new sanctions imposed following the Russian-Ukrainian conflict in a press release. last Tuesday.

He said in the statement that none of the group’s members, its subsidiaries, associated companies, significant shareholders, directors or officers were on global sanctions lists or had engaged in sanctioned activities.

While the subsidiaries deal with sanctioned entities on the United States sanctions lists and European Union sanctions lists – including Gazprom Group, Rosneft Group, Sberbank Group and Lukoil Group – Don Agro stated that these were transactions that were not on the relevant Sanctions Prohibited and/or Sanctions Restricted Transactions Lists.

He added that all such transactions with the entities mentioned are in accordance with the company’s Sanctions Compliance Policy.

Don Agro provided more details on Friday – in its response to SGX – about its dealings with the sanctioned entities, and said it considers its dealings with Sberbank and Rosselkhozbank to be “significant”.

Sberbank is currently the only financial institution providing loans to the group, and Don Agro received loans of 365.9 million rubles (S$6.7 million) last year.

At the same time, its deposits with Rosselkhozbank amounted to 266.4 million rubles, or 70.7% of the group’s total cash and cash equivalents as of December 31, 2021.

However, Don Agro said, it will be able to replace and refinance its placed deposit and existing loans with other banks, if necessary.

It added that its current free cash and cash equivalents are “sufficient to fully repay all existing loans, if necessary, and the group is able to continue funding its operations without seeking new loans”.

Don Agro’s relations with the Rosneft group and the Lukoil group relate to the purchase of fuels for transport and agricultural machinery from the company’s subsidiaries.

The cost of fuel purchased from these entities represented approximately 3.5% of the group’s total cost of sales in fiscal year 2021.

Shirlene J. Manley