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Ukraine's Agroton considers notes changes, lacks cash to pay coupon
By Caroline Salls
Pittsburgh, July 16 - Agroton Public Ltd. is considering proposing amendments to some of the terms of its $50 million of 12½% notes due 2014 because of its inability to withdraw cash from its sole cash account and a lack of sufficient operating cash flow, according to a news release.
Because of poor weather conditions during the 2012-2013 agricultural year compared to the previous 2011-2012 period, the company said it currently lacks sufficient operating cash flow to finance the current 12½% coupon on its notes.
As a result of these factors, Agroton said it is considering the need to amend terms of the notes, including terms related to the payment of interest.
In addition, as a Cypriot company, Agroton Public said its sole cash account is with the Bank of Cyprus. On April 28, the Bank of Cyprus Public Co. Ltd. proceeded with a recapitalization through a bail-in of depositors, which affected Bank of Cyprus customers with total deposits of more than €100,000, including accrued interest, on March 26.
Agroton said it had about $4.5 million in its account with the Bank of Cyprus on March 26.
As a result, according to the most recent Bank of Cyprus statement dated July 15, the company said it cannot withdraw any cash from its sole cash account.
A total of $1.6 million of Agroton's cash account has been converted into equity, $1 million has been written off as a provision for the equity conversion, and the remaining $1.9 million is currently inaccessible.
Agroton said it contacted the bank about gaining access to its available balance, but, in the meantime, it plans to open a second cash account with a third-party bank.
Agroton is a Luhansk, Ukraine, agricultural production and distribution business.
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