Avangardco announces it won’t pay April coupon on time

Ukraine’s biggest egg producer Avanagardco (AVINPU, AVGR LI) announced on May 2 that a coupon on its Eurobond will not be paid on schedule and it will “make use of the 14-day grace period.” A semi-annual cash coupon (5% p.a.) on Avanagardco’s outstanding USD 214 mln Eurobond was due on April 29. The company also reported it is in talks with an ad hoc committee of bondholders on a long-term restructuring. The committee members hold about half of Avanagardco bonds outstanding and about 40% of the bonds of its parent company Ukrlandfarming (UKRLAN).

Recall, Ukrlandfarming also reported on March 21 it is not going to pay the coupon on its Eurobond, due on March 27.

Alexander Paraschiy: Given the relatively small cash coupon payment of Avangardco, we were anticipating the company would be able to pay it this time. The refusal to pay only confirms our negative view on Ukrlandfarming and Avanagardco. The grace periods for their coupons expire on May 11 and May 16, respectively, so we may see announcements with restructuring proposals in a week or two. We can only hope that the companies will meet these deadlines.