Dubai, Oct 6 - Russian grain processing firm PAVA hopes to attract 100 million euros ($147.3 million) of investment from the Gulf region through a share sale that offers access to sought-after farmland, an executive said on Tuesday.
PAVA, the first Russian grain processing company to float on the stock market, has started an investment road show across the Gulf region, which included visits to Saudi Arabia, the United Arab Emirates and Qatar.
"Through the sale of our shares we aim to raise around 100 million euros which will be used to triple the area of farmland we have in Russia," said Sergey Balaenkov, chief financial officer of PAVA told Reuters during a visit to Dubai.
"In Saudi Arabia we met with a number of public sector investors and they have shown great interest in buying our shares and we will be signing a contact soon," he said, declining to give further details about the investors.
PAVA said earlier this year it would offer Gulf investors access to 500,000 hectares (1.24 million acres) of Russian farmland by way of an equity stake in the firm.
The move sidesteps Russian law which prevents foreign investors from owning farmland and helps Gulf investors secure farmland and helps Gulf investors secure food supplies.
Balaenkov said that after the share sale, PAVA will seek to raise another 100 million euros of funds through debt.
"Once we secure the investments from the Gulf it would be easier to convince banks to lead us the money we need for the project."
In addition to purchasing more land the funds raised through the share sales will be used to buy new technology to increase the produce of the land, said Balaenkov.
"Russian black soil is very fertile and we believe with the right technology we can increase output from 3.5 tonnes of wheat per hectar to 8 tonnes."
Gulf countries, mainly reliant on food imports, have ramped up efforts over the last year to buy land in developing nations.
In April, the father-and-son-owned company said it had plans to sell shares through private placements of up to 40 percent of shares in Russian Agricultural Division (RAD), the PAVA subsidiary responsible for land assets.