LWM pulls out of Russian frozen potato business

Structure Lamb Weston Meijer (LWM) sold 74.9% in the largest Russian producer of frozen French fries LVM Rus. According to SPARK-Interfax, the deal was closed on 13 September. It follows from the data of the system that now this share belongs to LVM Rus itself. 25.1% remains with a member of the board of directors of a large agricultural holding – Belaya Dacha Group of Companies – Vladimir Tsyganov. His representative declined to comment. A request to LWM went unanswered.

Lawyers interviewed by Vedomosti say that under the law it is Tsyganov, despite his minority stake, who is considered the main owner of LVM Rus, at least for the moment. The law “On Limited Liability Companies” allows for a situation where a stake in a company belongs to itself, says Evgeny Afanasiev, a lawyer at Forward Legal. According to him, all decisions in this case will be made by the remaining participant – that is, Tsyganov. When distributing profits, the share of 74.9% will not be taken into account, explains Afanasiev. He also adds that the law prescribes to distribute it among the remaining participants or transfer it to third parties within a year. If this does not happen, the authorized capital will be reduced by the size of such a share (74.9%), adds Vladimir Shalaev, lawyer and partner of the Legal Group.