Ukrainian agricultural company Agroton bondholders approve restructuring of USD 50mn bonds.

By bne IntelliNews August 11, 2013

The holders of the Eurobonds that the Agroton group of companies (Luhansk), a major agricultural producer, issued for USD 50mn, approved the changes that the group proposed to the terms of the issue of the Eurobonds on August 8, after the company's cash was frozen in a Bank of Cyprus account.

In particular, the group proposed extending the maturity of the bonds until 14 January 2019, deferring the payment of the yield from 14 July 2013 to 14 January 2014, and reducing the yield rate of the securities from 12.5% to 8% per annum.

The company pointed out last month, that out of about USD 4.5mn it had in the bank at the end of March, USD 1.6mn was converted into equity, USD 1mn was written off and USD 1.9mn remained frozen.

In July, both Fitch and S&P lowered their ratings on Agroton, following the announcement that it is unable to make the payment of its USD 3mn coupon due on 14 July 2013 due to its inability to access its cash and that it has asked bond-holders to consider a proposal to restructure the terms of the USD 50mn Eurobond.

Besides trouble with finances, Agroton revealed a pessimistic outlook for its 2013 harvest, expecting its sunflower harvest area at 35thsd/ha (-9% y/y) and yield at 1.5 t/ha (-17% y/y). The company expects its wheat harvest at 34thsd/ha (-21% y/y) and yield at 2.7 t/ha (-16% y/y) in 2013. It didn’t disclose its planted area. Agroton explained the y/y decrease in expected harvest area by citing dry weather in its farming regions in autumn 2012 and spring 2013. Combined with expected lower crop prices, these plans should lead to a significant deterioration in the company’s P&L and operating cash flow this year.

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