Agroton purchases 44% of its own Eurobonds

Farming company Agroton (AGT PW) reported on April 14 that it has purchased its own notes in an aggregate principal amount of USD 22.1 mln. The company sold its notes worth USD 50 mln in July 2011. Since July 2013, it has completed a series of debt restructurings that prolonged the notes from 2014 to 2019 and decreased their coupon rate to 6% from an initial rate of 12.5%.

Alexander Paraschiy: While this purchase could be considered encouraging for Agroton bondholders, we do not believe such a move dispels the question of the company’s extremely weak corporate governance. We also note separately that an investment into Agroton paper right now carries significant geopolitical risk, as the company’s region of operation, Luhansk Oblast, has become a hot spot of separatist activity.