The World Bank Group’s International Finance Corporation (IFC) may acquire three grain storage facilities from Mriya Agro Holding in Ternopil region as part of debt restructuring.
IFC requested respective permits for assets owned by private enterprise Noriia Zakhid, Black Bryony Holdings LLC and Elagri-Derenivka LLC, the Antimonopoly Committee of Ukraine has said.
As reported, Mriya and IFC in May 2017 agreed on the terms of restructuring of the holding’s debt. The parties agreed to split the debt into a secured and unsecured part. They also stipulated terms for restructuring the secured part of the debt. Mriya’s unsecured debt to IFC will be restructured on common conditions for all unsecured creditors.
Mriya’s total debt is $1.087 billion, of which $46 million is loans for working capital, $7 million for leasing of agricultural machinery, $130 million is secured loans, and $904 million is unsecured loans.
After the restructuring, the amount of secured loans will be reduced to $62 million, unsecured ones to $ 213 million.
Mriya is a vertically integrated agro-industrial holding founded by Ivan Huta in 1992. Today, its land bank is 165,000 ha in Ternopil, Khmelnytsky, Ivano-Frankivsk, Chernivtsi, Lviv and Rivne regions. The capacity of its grain storage facilities is estimated at 380,000 tonnes.
Fields with spring crops of Mriya agroholding this year would expand by almost 21% compared with 2017, to 103,250 ha, the company said on Tuesday. The company said in a press release that this year the sowing campaign was started later than it was planned due to late spring.
“Due to weather, we will have to carry out the spring sowing campaign on a tight schedule. We have adjusted our plans and intentionally increased the share of early grain crops, spring barley and rapeseeds, to 14,200 hectares and 7,500 ha in the structure of the areas planted by Mriya. We also succeeded in promptly contracting additional tillage equipment and seeders, so we hope to complete the sowing of spring crops without falling behind the plan,” Mriya Chief Operation Officer Andriy Hryhorov said.
This spring, the strategic agricultural crops for the holding are sunflower, with 33,500 hectares, corn (14,800 hectares), soybean (24,700 hectares) and sugar beet, the areas under which are doubled compared with last year, to 7,200 ha. Traditionally, peas (356 hectares) and potatoes (660 ha) are also present in the structure of the areas planted by Mriya.
During the sowing campaign 2018 some of the areas the agroholding will be sowed with seeds of its own production, in particular, soybeans.
A deal to sell Mriya agroholding could take place only after the completion of restructuring of its old debt, the agroholding’s press service has reported. According to the report, there is the interest of potential investors to the company. In particular, in 2017, Kernel and several large agricultural market players offered creditors of Mriya to buy the company. In 2018, some offers from Ukrainian and international companies arrived.
“For our creditors, the current owners of Mriya, agriculture is not a core business, and servicing the working capital of Mriya is a compulsory measure. Therefore, as I have repeatedly said, the arrival of a strategic investor is an ideal option for the further development of Mriya,” the press service said, citing Mriya CEO Simon Cherniavsky. According to him, before the completion of debt restructuring, there is neither a subject of a potential transaction nor a legal mechanism for its implementation.
“We have completed the restructuring of the most of the secured debt and started implementing the agreements reached with unsecured creditors. At this stage we have faced a number of difficulties related to the novelty and uniqueness of the procedure for the Ukrainian legislation and the enforcement system, which delays the process. I would refrain from giving forecasts,” CEO said.
Mriya said that the working capital of the agroholding today is financed by its creditors, mainly – bondholders from the United States and Europe. “We have funds in the full amount for this season: we have enough funds for sowing and harvesting, paying rents, fulfilling social obligations and even replenishing the technical park and investing in technology development. Mriya is working in a usual mode and is confidently looking to the future,” said Cherniavsky said. Previously, the media reported that negotiations about the possible purchase of Mriya by Continental Farmers Group are being held.
