January 10, 2014 | Cbonds
Ivan Dzvinka, Research Associate, Eavex Capital
The new restructuring conditions of Agroton’s USD 50mn Eurobonds, which include another cut in the coupon rate, have been approved by bondholders, the company announced in a statement on the Warsaw Stock Exchange on Jan 3. The new conditions were originally floated in late November. While the approved offer envisages leaving the new maturity date unchanged at July 2019, several amendments have been approved, including:
• a reduction in the coupon rate to 6.0% from the 8.0% set by the previous restructuring (vs. the initial rate of 12.5%);
• the postponement to January 2015 a coupon payment due on 14 January 2014 (which includes the previously postponed 14 July 2013 coupon) as well as postponement of the coupon due on 14 July 2014;
• reducing the quorum of a bondholders’ meeting aimed at passing an Extraordinary Resolution to two or more persons whose holdings represent 50%+ of the principal amount of the notes;
• ability to pass an Extraordinary Resolution if holders of 50%+ (vs. 66.6%+currently) of the principal amount present at the meeting vote for it.
Given that a majority (we are unaware of the exact percentage) of Agroton’s bonds are reportedly concentrated in the hands of the company’s major shareholder Vitaliy Zhuravlov and/or related parties, the approval was an expected scenario. We reiterate our view that a further deterioration/ reduction in the coupon or maturity is possible in light of the significant deterioration in the company’s corporate governance over 2013.
|Status||Default||Country of risk||Maturity (option)||Amount||Issue ratings (M/S&P/F)|
|Full company name||Agroton|
|Country of risk||Ukraine|