Ukrlandfarming restructures USD 60 mln of ECA loan

Ukraine’s largest farming company Ukrlandfarming (UKRLAN) has agreed with a U.S. export-import agency to restructure a USD 60 mln loan, having delayed the facility’s maturity by eight years, Interfax-Ukraine reported on May 12, citing the company’s board chairman and majority shareholder, Oleg Bakhmatyuk. The report disclosed no further details of the arrangement. In the same report, Bakhmatyuk also announced an upcoming restructuring of a USD 90 mln loan with a Canadian export-import agency, as well as the restructuring of several loans from European export-import agencies as being in their final stages.

In an interview with the liga.net news site in mid-April, Bakhmatyuk stated his company has preliminarily agreed to restructuring of half of its Export Credit Agency (ECA) loans outstanding, totaling USD 300 mln. Ukrlandfarming’s total debt stood at USD 1,601 mln as of end-2015.

Roman Topolyuk: Ukrlandfarming is currently focused on postponing the maturities on its debt. By the end of 2015, the portion current debt decreased to 14% of the total, compared to 38% year ago. Once the company finalizes the restructuring of its ECA debt, it will have to further review the terms of redemptions of its UKRLAN and AVINPU Eurobonds, maturing in 2018 and having total outstanding debt of USD 778 mln by that time. We reiterate our negative view on UKRLAN and AVINPU bonds since the company’s ability to generate positive free cash flow is limited currently.