Business Forum • 14 October, 2024 at 10:41 AM
Holde Agri Invest SA, one of the largest agricultural land operators in Romania, announces the implementation of concrete measures aimed at the recovery of the group's activities and ensuring its long-term positive development. These measures come in response to the significant challenges faced over the past two years, during which agricultural companies in Romania, including Holde Agri Invest, encountered a series of overlapping crises that led to significant losses and decapitalization.
Among the main challenges was the explosive rise in fertilizer prices in 2022, followed by the drop in agricultural product prices in 2023, which failed to cover production costs. In 2024, the droughts that affected southern Romania severely impacted Holde Agri Invest's five core farms, further aggravating the group's situation.
Considering the difficult context, Holde Agri Invest's medium-term priority is to stabilize its financial situation and consolidate the business, with plans for expansion and development to resume in the long term. In this context, a part of the Board members – Iulian Circiumaru, Leonard Alexandru Leca, and Robert Maxim – have decided to become directly involved in the company's turnaround process, with a clear objective of returning the company to profitability in the medium term. The combined professional experience of these three Board members, who are also significant shareholders, reflects their responsibility to other shareholders who have trusted the company since its listing on the AeRO market.
"Holde Agri Invest has been a public company since 2020 and was listed to offer exposure to the agricultural sector in Romania, being a pioneer in this direction. The company has always been transparent and fair with its investors throughout this period. Considering the difficult context we are currently facing, we want to send a strong and clear message to all our stakeholders: together with my colleagues on the Board of Directors, we are fully aware of the gravity of the situation in which both the group and the entire agricultural sector in Romania find themselves. Therefore, we want to assure our shareholders that we are constantly engaged in discussions with our partners – from financial institutions, which have supported us and continue to do so, to suppliers and clients, with whom we are working to find solutions to maintain collaboration and secure their support for the ongoing production cycle. We are convinced that only with the support of all these partners will we be able to overcome this challenging period," stated Iulian Circiumaru, Chairman of the Board of Directors of Holde Agri Invest.
Holde Agri Invest is a young group in the agricultural sector with only five years of operational activity, the last two of which should have been dedicated to consolidation. However, the company continued its previously initiated investments despite significant challenges, which further complicated the management of crises during 2022–2024.
As a result of these events, the Board of Directors of Holde Agri Invest decided to change the management team, appointing interim CEO Bogdan Serghiescu and new CFO Bogdan Lungu. These decisions were recently communicated to the Bucharest Stock Exchange. The Board expresses complete confidence that the two executives will successfully manage the company's current challenges for the benefit of all shareholders. These changes are part of a broader turnaround plan envisioned by the Board of Directors, which includes measures in management, reorganization, cost control, and financial strategies.
Leonard Alexandru Leca, Member of the Board of Directors of Holde Agri Invest, added: "As members of the Board, we fully support the new management team in implementing all measures to increase efficiency. We have started the process by restructuring the organization and adjusting the direct costs for each crop. We aim to adjust these costs without compromising productivity or endangering operational performance. Additionally, we are analyzing and optimizing all indirect and administrative costs to create a more efficient structure for our group. We are also in advanced discussions to establish new partnerships and attract new investors who can contribute to Holde Agri Invest's development."
To support the recovery effort and meet the company's current needs, SEVENX VENTURES S.R.L., a significant shareholder of Holde Agri Invest, has granted the company a loan of RON 1.5 million, maturing on 01.10.2027. This option was preferred due to the quicker process compared to a share capital increase, and the loan provided by shareholders is subordinated to existing loans with the group's main bank. The possibility of converting this debt into shares in a future share capital increase is also considered. The loan carries a fixed interest rate of 10%. The Board of Directors is also in advanced discussions to identify additional financing solutions from financial institutions in the coming period.
"Despite the challenging period we are going through, we are actively involved, both through our professional expertise and the ongoing support of our employees, suppliers, and clients. Furthermore, we are focused on protecting the interests of our shareholders and partners, including financial institutions, as we seek the best solutions to navigate this difficult period. We are confident that, thanks to the measures already implemented and the excellent condition of the crops planted, we will manage to turn the company around, bringing it back on profitable course," stated Robert Maxim, Member of the Board of Directors of Holde Agri Invest.
The measures the management team took in recent months, in the context of a challenging year, have gradually started to show their effects. However, implementing some of these measures requires time and a significant impact will be felt in 2025. Until then, the group has suspended all expansion plans until the company stabilizes.