MHP bondholders approve proposal for amendment of covenants
9 March 2016
The majority of the holders of USD 750 mln in notes of Ukraine’s largest poultry producer MHP (MHPSA) have supported the company’s proposed amendments to covenants, MHP announced on March 8. The majority consisted of 91% of bondholders, MHP clarified with Concorde Capital. The amendments envisage an adjustment of consolidated net profit, eligible for dividends and other restricted payments, for non-cash foreign exchange losses. The company has capped restricted payments at USD 80 mln, and the portion of the consolidated net profit that will be allowed for distribution was reduced to 40% from 50%.
The bondholders supporting the change are eligible to receive a consent fee of USD 12.5 per USD 1,000 of nominal bonds outstanding. The payment is scheduled for today.
Roman Topolyuk: With the amendments approved, MHP can pay out dividends and incur investments in joint ventures, even despite a nominally negative bottom line. The company reported net loss of USD 37 mln in 9M15 (compared to USD 302 mln), mainly due to a non-cash foreign exchange loss of USD 289 mln, while generating solid operating cash flow (net operating cash of USD 166 mln in 9M15, down 37% yoy). MHP has been a regular dividend payer, giving out USD 50 mln last year, and we expect it will pay about the same amount this year.
