MHP says 91% of Eurobond holders agree to swap

Myronivsky Hliboproduct (MHP) said in a statement on the London Stock Exchange yesterday that 91% of the holders of its Eurobonds, representing USD 226.5 mln of its USD 250 mln issue, agreed to its exchange offer by its early participation deadline on Wednesday. MHP MHP offered its existing bondholders to swap their USD 250 mln Senior Notes due 2011 for new dollar-denominated Senior Notes due 2015. The new notes will have par value 3.3% to 6.3% higher than the old ones, depending on the date the offer is accepted. The final settlement date is May 13, 2010. Ruslan Patlavskyy: In line with our expectations, the 91% exchange of existing MHP-11 notes for new ones within such a short timeframe (offer announced on April 12) proved investor interest and the credibility to fundamentally strong Ukrainian agricultural plays, like MHP. We expect MHP’s GDRs to continue appreciating as the proximity of the existing notes’ maturity in November 2011 challenged its CapEx plans; this pressure is now behind the company for the next five year. We see the prolongation of nearly half of the company’s total debt (1) alleviating pressure on MHP’s working capital needs, supporting its forecast of 19% yoy growth in poultry output to 330 ths tons in 2010; (2) allowing for the retainment of cash for further land bank expansion and construction of its Vinnitsa factory; and (3) providing MHP more room to maneuver with its short-term bank loans, which total USD 114 mln (as of December 2009).