Ukraine’s MHP asks to amend 8¼% notes to adjust for hryvnia decline

By Susanna Moon

Chicago, Feb. 11 – MHP SA said it is soliciting consents to amend its $750 million 8¼% notes due 2020 to adjust for foreign currency movements.

The amendments would allow the company to ignore non-cash foreign exchange gains and losses under some of the financial covenants, adjusting the calculation of the consolidated net profit to be in line with MHP’s underlying financial performance, according to a company notice.

As of Feb. 1, the hryvnia has depreciated by 69% against the dollar since Jan. 1, 2014 based on the exchange rate of the National Bank of Ukraine, resulting in significant non-cash losses for the company, the release noted.

Specifically, the company is asking to

• Modify the definition of consolidated net profit to exclude the effect of net foreign exchange gains or losses for any period beginning July 1, 2014; and

• Drop the cumulative basket for restricted payments to 40% from 50% of the consolidated net profit for periods from Nov. 30, 2006.

The company said that reducing the cumulative basket for restricted payments to 40% would have the effect of reducing the overall amount of permitted restricted payments that the company would be allowed to make due to the changes in the definition of consolidated net profit.

In order to pass, the amendments require the consent of holders of at least a majority of the outstanding notes.

The consent payment is $5.00 for each $1,000 principal amount.

The consent solicitation will run until 5 p.m. ET on Feb. 26, with settlement set for March 2.

For a copy of the consent solicitation memorandum, go to sites.dfkingltd.com/mhp.

J.P. Morgan Securities plc (+44 0 207 134 2468 or em_europe_lm@jpmorgan.com) and Morgan Stanley & Co. International plc (212 761-1057, 800 624-1808, +44 0 20 7677 5040 or liabilitymanagementeurope@morganstanley.com) are the solicitation agents. D.F. King Ltd. (212 269-5550, 800 499-8541, +44 20 7920 9700, +852 3953 7230, mhp@dfkingltd.com or sites.dfkingltd.com/mhp) is the information and tabulation agent.

MHP is a poultry producer based in Kiev, Ukraine.

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