Ovostar to receive USD 16 mln, seven-year loan

Ukrainian egg producer Ovostar Union (OVO PW) completed all the procedures necessary for the disbursement of a seven-year, EUR 14.5 mln syndicated loan, the company reported on Feb. 11. The loan will be provided by AKA Ausfuhrkredit and Landesbank Berlin with a guaranty provided by Euler Hermes. According to Ovostar, the raised funds will be used to finance the purchase of poultry housing equipment as part of its investment plans.

Alexander Paraschiy: With total debt of USD 14.9 mln and net debt of USD 10.9 mln as of end-September 2014, Ovostar is one of the least leveraged publicly traded Ukrainian companies. It was able to finance its expansion program of 2011-2014 and to spend about USD 90 mln for CapEx and increasing biological assets, mostly from raised equity (about USD 33 mln in 2011) and generated operating cash flow.

As a result of that program, Ovostar doubled its laying hen flock and nearly doubled egg production in 2014, as compared to 2010. The company has been planning to spend USD 25 mln for expansion in 2015 and to increase its laying hen capacity by about 20%, so the secured credit facility should enable it to smoothly pursue its plan.