November 06, 2018 | Cbonds
|Saudi Agricultural and Livestock Investment Company (SALIC) completed the deal to acquire the majority of the assets of Mriya group (MRIYA), the company reported on Nov. 5. “The value and terms of the transaction have not been disclosed,” the report said. Mriya will continue its operations alongside SALIC's other Ukraine-related subsidiary, Continental Farmers Group.|
Recall, Mriya announced in September that SALIC is going to purchase the new bonds of Mriya Farming from their holders as part of an acquisition in which bondholders receive in cash 53%-62% of par value of those bonds. They were issued by Mriya Farming as part of a debt restructuring that assumed a 88%-90% face value haircut of Mriya’s old unsecured debt.
In related news, Deputy Prosecutor General of Ukraine Eugene Enin announced on Nov. 5 that the former director of a top agricultural holding has been extradited from Switzerland to Ukraine and arrested on criminal charges of fraud, estimated at UAH 800 mln. The epravda.com.ua news site identified this suspect as Mykola Huta, Mriya's former CEO and majority shareholder. It published a photo of Huta being in police custody.
Alexander Paraschiy: If the SALIC-Mriya deal is completed under the announced terms, the holders of old Mriya Eurobonds will recover 6.4%-7.4% of their par value. This is better than the 4.0% recovery rate secured by bondholders that did not approve of the restructuring offer or selected cash alternative to the new bonds. But it's still too little, given that they had to wait more than four years for that recovery.
Theoretically, the former creditors may also count on the further recovery of debt via Recovery Certificates, providing Mriya’s legal advisors are able to recover something from the Huta family. But the recovery rate is unlikely to be high. The fraud estimate of UAH 800 mln (or about EUR 25 mln) is 3.3% of par value of all the Recovery Certificates, but that amount may not be recovered.
As for Mykola Huta's extradition, it could become a rare success for Ukraine’s law enforcement system in prosecuting and punishing a multimillion fraud, or its latest failure.
|Status||Country of risk||Maturity (option)||Amount||Issue ratings (M/S&P/F)|
Company: Mriya Agro Holding
|Full company name||Mriya Agro Holding|
|Country of risk||Ukraine|
|Country of registration||Cyprus|