Egg dispute in Crimea threatens to boil over into London

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The Ukraine-Russia dispute has caused consternation for many of the region's oligarchs already – but Oleg Bakhmatyuk, the Ukrainian egg tycoon, may be the first to crack and threaten legal action.

The founder of London-listed Avangardco, the world's second-biggest egg producer, has pledged to take legal action against Crimean officials, who are attempting to nationalize an Avangardco-owned factory in the region via a forced buy-out.

The dispute threatened to boil over into legal action after Bakhmatyuk cited the recent $50 billion awarded to Yukos shareholders in The Hague.

It also casts an unflattering light on the intentions of the new regime in Crimea, now part of Russia again, after a conflict with Ukraine earlier this year which has caused one of the most worrying geopolitical crises of the decade.

The economy has been one of the key battlegrounds of the dispute between Russia and Ukraine, with sanctions against Russian tycoons and businesses the biggest weapon wielded so far by the Western powers.

Agriculture is one of Ukraine's biggest industries, and Avangardco one of its best-known companies. Bakhmatyuk set up the company in 2003, and built it up by rapidly acquiring poultry farms in Ukraine. Avangardco raised $208 million on the London Stock Exchange in 2010. A later Bakhmatyuk venture, Ukrlandfarming, which still owns the majority of Avangardco, has tried to expand the business beyond chickens. It is part-owned by U.S. agriculture company Cargill.

Crimea accounts for less than five percent of Avangardco's revenues. However, the Donetsk and Luhansk regions made up around 19 percent of its group revenues last year, suggesting that the company may be in more trouble if fighting continues in those regions.

Ratings agency Fitch, which has a CCC rating on the Ukrainian egg company, warned the crisis "may ultimately threaten the group's financial flexibility and its ability to meet its debt obligations" in a statement Monday.

Avangardco's representatives had not responded to a request for comment by the time of publication.

- By CNBC's Catherine Boyle