KYIV. June 14 (Interfax-Ukraine) – Mriya Agro Holding has approved a plan of investment for the second half of 2016 in the amount of $15.2 million, subject to replenishing its working capital, the company said in a statement.
“Specifically, the company intends to allocate $12.5 million for purchase of machinery and equipment including leasing operations and $2.7 million for support and official registration of the land bank,” the statement reads.
The total sum of investments planned for 2016 is $17.2 million.
According to the company’s plan and sufficient availability of working capital, the management expects the value of this year’s harvest to be $114.4 million based on the current forecast of market price. The operating cash flow for May-December 2016 is estimated at $15.9 million.
“However, due to the ongoing negotiations on restructuring of the company’s debt portfolio, the issue of future replenishment of working capital remains open. If the working capital is restricted to the currently available amount of the working capital facility, Mriya’s management forecasts that this will have a negative impact on revenues and operating margin up to $7 million for the season,” the statement reads.
Under this scenario, the investment period will be postponed until late 2016 and the investment projects will be scaled down to $10 million, which will have a negative impact on the results for the 2016-2017 season, the company said.
Mriya Agro Holding has already invested $2 million into the purchase of new equipment since the beginning of 2016. Specifically, the company has purchased John Deere 7930 tractors and Challenger8186 No-till sowing machines. Mriya has also made all mandatory investments in logistics and elevators and is ready for the harvest.
As was reported, Mriya Agro Holding is in talks on easing the debt burden from $1.3 billion to an acceptable level, which, according to creditors’ estimates, is about $300 million.
The remaining part of the debt will be converted into capital. The company hopes to complete the restructuring until the end of 2016.
As reported, Mriya in August 2014 reported on an overdue payment of about $9 million of interest income and about $120 million on its liabilities. The aggregate debt of the holding to all financial creditors, taking into account guarantees provided to entities related to the Huta family, at the time of defaulting was about $1.3 billion
In January 2015, creditors took operational control and elected new managers.
