Mriya auction results imply 4% cash recovery of old bonds

Mriya Farming announced on Sept. 7 the results of its
auction of part of its new securities that it issued in exchange for the old
debt of Mriya Agro Holding (MRIYA). The company sold USD 20.48 mln of its
Restructuring Notes at 33.5% of par, 0.25 mln of Mriya Farming shares at 109.8%
of par and EUR 188.6 mln of recovery certificates at 0.111% of par.

Following a restructuring of Mriya Agro Holding’s debt
in August, the holders of each old Mriya Eurobond exchanged USD 100 of par
value of old bond for USD 11.84 in Restructuring Notes, GBP 0.00094 of new
shares in Mriya Farming and EUR 104.6 in recovery certificates (the instruments
which will be offered anything recovered from the former owners of Mriya Agro
Holding). The company also announced an auction to sell some new securities to
pay creditors who prefer receiving cash from Mriya.

Recall, Mriya Agro Holding announced in August 2014 it defaulted on some of its debt obligations,
as well as declared it had off-balance debt. In 2014, the company was taken
over by creditors who had been restructuring the company’s debt since then. The
restructuring was completed in August 2018. 

Alexander Paraschiy: Based on the auction results, we calculate that bondholders of Mriya
Agro Holding will receive in cash USD 4.01 for each USD 100 of par value of old
Mriya’s bonds. This is better than nothing, but below the latest market price
of Mriya’s old bonds (8-9% of par). Such a low recovery rate after four years
of restructuring talks could serve as a scarecrow for the creditors of another
Ukrainian farming holding in default, Ukrlandfarming (UKRLAN). At least now,
the management of Ukrlandfarming has more arguments in favor of its debt
restructuring offer that it presented last year.