Ukraine’s Avangardco gets court OK to extend notes to 2018, allow PIK

By Susanna Moon

Chicago, Oct. 28 – Avangardco Investments Public Ltd. said noteholders representing 99.89% of its $200 million 10% notes due 2015 voted for the amendments and waivers to the notes at a meeting held Oct. 22 in London.

The proposal was then sanctioned by court order on Oct. 26 from the High Court of Justice of England and Wales, according to a company notice.

At the meeting held on Oct. 22, holders representing 0.11% of the notes voted against the proposal. Noteholders at the meeting represented 89.20% of the outstanding principal amount of the notes, according to a separate notice.

As previously announced, Avangardco had obtained votes from 86.01% of noteholders for amendments and waivers to the notes as of noon ET on Oct. 15, the early participation date.

Noteholders for 0.1% of the outstanding principal amount of the notes had voted against the proposal, which requires the approval of a majority representing at least 75% of the noteholders at the meeting.

The company is looking to extend the notes to Oct. 29, 2018 and to allow interest in-kind.

Because court approval has been granted, holders who agreed to the lock-up agreement and voted for the proposal by the early participation deadline will receive an early participation fee of 2.5% of par.

Those who consented to the lock-up agreement and voted for the measure after the early deadline will receive a participation fee of 0.5% of par.

The solicitation ends on Oct. 29.

The company asked the court to grant the amendments and a waiver of events of default under the notes, with the initial hearing on Sept. 24 and the subsequent hearing on Oct. 26.

In September, the company entered into confidential discussions with some noteholders, and those holding about 36% of the notes had entered into a lock-up agreement dated Sept. 17 in which they agreed to vote for the proposal.

The proposed amendments include allowing payment in-kind and cash payment provisions as follows:

• 75% PIK, 25% cash for interest due April 2016 and October 2016;

• 50% PIK, 50% cash for interest due April 2017 and October 2017; and

• 25% PIK, 75% cash for interest due April 2018.

The interest due will revert back to cash for the October 2018 payment date.

The issuer also is seeking to pay the 5% coupon due Oct. 29, 2015 as follows: 2% to be paid in cash on Oct. 29 and 3% to be paid in-kind on Oct. 29.

The amendments also would modify some covenants and lower the quorum and voting requirements to 75% from 90%.

The company said that payment defaults had occurred under some bank facilities and was seeking waivers.

UBS Ltd. (203-719-8682, +44 20 756 84601, mark-t.watkins@ubs.com or torstein.berteig@ubs.com) is the solicitation agent. D.F. King Ltd. (+44 20 7920 9700, +852 3953 7230, 212 269 5550, avangard@dfkingltd.com or sites.dfkingltd.com/avangard) is the information agent.

Avangardco is a producer of eggs and egg products based in Kiev, Ukraine.

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