"Taking into account its debt maturity profile, the Group … analyses various scenarios to service the bonds, focusing in particular on those USD 500 million maturing in May 2024, and has developed a plan, which, in management's view, should provide for a mutually beneficial solution to both the Group and the bondholders," the statement reads.
MHP said it had reached an agreement in principle with several international financial institutions to obtain a loan of up to USD 400 million, including with the European Bank for Reconstruction and Development, which is going to provide a quarter of the amount.
MHP plans to use the money to refinance its 7.75% bonds issued in 2017.
"The main objective of the Project is to enable the Group to sustain its financial resilience by refinancing its Eurobonds at a time of limited access to capital markets financing due to the ongoing war on Ukraine", the EBRD said in a statement.
Myronivsky Hliboproduct (MHP) is the largest producer of chicken in Ukraine, holding more than 55 percent of the Ukrainian chicken production market, and exports to the European Union. MHP owns Nasha Riaba, Lehko, and Bashchynskyi brands.
Ukrainian businessman Yurii Kosiuk owns 59.7 percent of MHP through WTI Trading Limited. The group's main production facilities are located in Ukraine, and it also has factories in Slovenia, Serbia, Croatia, and Bosnia and Herzegovina.
MHP has two more notes in its portfolio, but with a later maturity—USD 550 million bonds 2026 at 6.95 percent and USD 350 million bonds 2029 at 6.25 percent.
In February, Fitch warned that MHP would have to negotiate a refinancing of the 2024 bonds.
"We estimate that the company's available cash balance of USD 300 million as of end-2022 and expected modest free cash flow (FCF) generation in 2023 will not allow MHP to repay the notes. We therefore believe some refinancing will be discussed with its creditors," it said.
