Azernews.Az

By Bloomberg

Mriya Agro Holding Plc, the Ukrainian agriculture company that defaulted on about $1.2 billion of debt last year, is close to securing a lifeline from creditors to stave off liquidation.

Bondholders and bank lenders will open a six-month $25 million working-capital facility under an agreement due to be signed this week, said Giovanni Salvetti, a Moscow-based Rothschild managing director, who is advising the creditors. That will allow Ternopil-based Mriya, one of Ukraine’s largest farming producers, to complete its winter harvest and purchase fertilizer for spring crops including sunflowers, soy and corn, he said.

The deal will be among the first new money raised in Ukraine from private international investors since a war broke out in the country’s easternmost regions, Salvetti said. The conflict has led to an economic slump and currency collapse, which has forced Ukraine’s government and companies, such as Metinvest BV, to seek debt-restructuring talks.

Mriya’s creditors took effective control after the company’s then-main shareholder and chief executive officer, Mykola Guta, left the country. Guta is now being sought by Interpol on charges of fraud. New management, headed by CEO Simon Cherniavsky, was installed in February.

“We’ve brought the situation under control,” Salvetti said. “New investors are now starting to look into buying the bonds or bilateral loans.”

The credit facility means Mriya could potentially be sold for $600 million to $700 million in a few years’ time, depending on the debt-restructuring and improvements in the political situation, he said. That compares with a “maximum $150 million to $200 million” from selling it off in parts with no new money, he said.

Restructuring Plan

A restructuring plan will be discussed this month, and may be implemented by October, according to a presentation published on the company’s website in March. Cherniavsky wasn’t immediately available for comment.

Mriya’s $400 million of junior bonds due April 2018 were quoted at 14.5 cents on the dollar on Monday, up from a record low of 10 cents in December, according to data compiled by Bloomberg.

The Ukrainian government is seeking to reach an agreement with its bondholders by mid-June to access the next installment of a $17.5 billion loan from the International Monetary Fund. The nation’s economy shrank 17.6 percent last year as war caused disruptions and instability. The hryvnia has tumbled 61 percent against the dollar since the end of 2013, making it the world’s worst-performing currency.