Avangardco announces no coupon payment on its Eurobond

Ukraine’s leading egg producer Avangardco (AVINPU)
reported on May 2 that it won’t make a scheduled coupon payment on its USD 200
mln Eurobond this month. The missed payment under AVINPU notes, as well as two
missed semi-annual payments in 2017, will be a part of debt restructuring
talks, Avangardco reported.

Recall, Avangardco and its parent company
Ukrlandfarming (UKRLAN) stopped paying coupons on their Eurobonds since 2017.
A year ago, the companies announced the initiation of debt restructuring talks
that were expected to be completed in mid-summer 2017.

Alexander Paraschiy: The debt
restructuring talks of these companies, all controlled by Oleg Bakhmatyuk, are
being delayed, indicating an unwillingness of the Eurobond holders to agree to
alleged proposals for a 50% haircut, slashed coupon rates and a more than
eight-year extension of the bonds’ maturity. On top of that, most likely
Bakhmatyuk is trying to include his personal debt to Ukraine’s National Bank –
and to his two failed banks – into the perimeter of Ukrlandfarming/Avangardco
corporate debt, which the companies’ creditors are apparently opposing.

Meanwhile, without any restructuring progress,
Bakhmatyuk’s debt to Eurobond holders is growing. As of today, Avangardco’s
outstanding Eurobond should have amounted to USD 235.9 mln (including PIK
notes) and it owes its bondholders cash coupons for the last three coupon
periods in the amount of USD 20.1 mln.

Ukrlandfarming’s outstanding Eurobond (initially
issued at USD 500 mn par) should have amounted to USD 542.8 mln (including PIK
notes) and it owes its bondholders cash coupons for the last three coupon
periods in the amount of USD 88.5 mln. That said, the total debt of the
holdings under their USD 700 mln in notes is today USD 887 mln. We continue to believe
the notes have little value.