Kernel secures USD 80 mln loan

Grain trader and sunflower oil producer Kernel (KER PW) reported on Feb. 24 that it secured an USD 80 mln loan with a syndicate of Ukrainian and European banks. The facility will be used for working capital purposes related to the 2014 crop, according to the company.

Roman Topolyuk: Though the secured new credit line boosts the liquidity position of Kernel ahead of next sowing campaign, we see the implications for equity value may be negative. In particular, the consensus estimate of the company’s end-June 2014 debt (USD 548 mln) may be an underestimation. Kernel’s net debt stood at USD 712 mln as of end-September 2013, and a new loan tranche might lead to its further increase unless the company repays some portion of it in the coming months.