Mriya warns creditors of liquidation, bankruptcy

Ukrainian agricultural holding Mriya (MRIYA) held a meeting with bondholders and other creditors on Dec. 16 to discuss the prospects of its debt restructuring process, the company announced the same day in a press release. It blamed the lack of progress on “the absence of a constructive consolidated position from the creditor side”.

The company proposed two options to the creditors, the press release said. They could either proceed with the disintegration process, leading to a “crackdown” of the group and bankruptcy of the majority of operational units, or consolidate their financial decisions to save the group. In particular, they need to sign all necessary documents by the end of January in order to give the green light to the offered restructuring, Mriya said.

Roman Topolyuk: The news is very negative for MRIYA, as it indicates the company isn’t likely to improve its restructuring offer made at the end of October. The restructuring foresees a large haircut of Eurobonds and other debt (around 66%), reported Forbes-Ukraina. The offered 2015 financial plan foresees a mediocre cash flow for debt repayment, since operating expenses and capital expenditures will eat out the projected operating cash inflows.

Yet some creditors have already launched the bankruptcy process of Mriya’s parent company, HF Assets Management, confirming a lack of compromise. Under such circumstances, even the current price of Mriya’s Eurobond of around 11 cents per dollar may be a high price.