Trigon extends partial redemption of bond loan in kind until year-end

By Susanna Moon

Chicago, Sept. 30 – Trigon Agri A/S said it again pushed out the timeline for the debt to equity swap related to its SEK 350 million of 11% senior secured bonds.

As a result, the partial redemption of the bond loan in kind now will be carried out by Dec. 31, extended from Sept. 30, according to a company notice.

Before the change, Trigon had to repay €1.5 million to a blocked account if all of the conditions for the debt to equity swap were not met by Sept. 30 and, before that, by June 30.

The extensions are again due to “administrative and technical aspects of the process [that] have taken more time than initially expected,” the company said.

Trigon said on March 23 that it had entered into an agreement with a committee of noteholders in which €1.5 million would be released to Trigon from a blocked account that serves as security for the holders of the bond loan.

The company then said on May 17 that it had extended the deadline for the partial redemption of the bond loan in kind to June 30, and the SPV receivable had to be amended to convertibles by Dec. 31.

Previously, Trigon had to repay €1.5 million to a blocked account if all of the conditions for the debt to equity swap were not met by May 17.

Trigon said a krona amount equivalent to €6 million will be redeemed from the bond loan, and the bondholders may jointly become owners of 195 million shares in the company through a Swedish public limited liability company, assuming full conversion. The number of bondholder shares will be equivalent to 60% of the shares and votes in Trigon.

In January, Trigon was granted a waiver by the committee to deposit €1.5 million from the divestment of 10.74% in AS Trigon Dairy Farming Estonia into a deposit account in accordance with the terms and conditions of the bond loan. However, the company said this amount was instead deposited with another blocked account.

“Inability to secure the proceeds from the blocked account could lead to irreversible severe financial consequences for the Trigon group,” the release said.

The company said the Trigon group will transfer amounts equivalent to at least the proceeds released from the blocked account to its Ukrainian operations to comply with monetary and foreign currency control legislation pertaining to export transactions in order to avoid heavy penalties in Ukraine.

As a result, the Trigon group will be able to maintain its Ukrainian export capability in order to maintain earnings.

Trigon said the group lacks sufficient working capital outside Ukraine to fulfill its short-term obligations in Russia and in its holding companies in Cyprus and Estonia. The €1.5 million released from the blocked account will allow the Trigon group to secure normal functioning and sufficient financing outside Ukraine until it starts to receive the proceeds from the sales of the 2016 crop.

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As announced April 27, noteholders have approved the company’s two separate proposals to restructure the bonds, with holders of 60.55% of the bonds participating and, of those, 98.58% approving the measures.

The written procedure was open to holders from April 12 through 11 a.m. ET on April 27.

The first proposal is for a partial redemption in kind of the bond debt with an aggregate amount of SEK 55,685,000 against allotment of shares in a Swedish public limited liability company, through which the holders will receive a right to convert a convertible bond into maximum 195 million shares in Trigon Agri A/S on some conditions.

Upon the partial redemption, each holder will be allotted one share per bond.

The second proposal, a waiver for a bridge loan to be incurred by Trigon in the maximum amount of €2 million and some collateral, became immediately effective upon bondholder approval.

Copenhagen-based Trigon is an integrated soft commodities producer, storage provider and trader with operations in Ukraine, Russia and Estonia.

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