UkrLandFarming 10 7/8% noteholders OK payment restructuring, waivers

By Wendy Van Sickle

Columbus, Ohio, April 21 – UkrLandFarming plc received the necessary bondholder consents on Thursday to restructure two interest payments for and waive conditions of its $500 million 10 7/8% notes due 2018, according to a company notice.

The meeting, which was called on March 30, was quorate with holders of about 86.88% of the notes represented, and an extraordinary resolution containing the waivers and amendments was approved by about 99.95% of those noteholders.

Amendments

In order to manage an acute shortage of liquidity and reduce cash expenditure in the short and medium term, the company solicited the consent of the noteholders to amend and restructure the semiannual interest payments of the existing 10 7/8% coupon due March 26 and Sept. 26, 2016.

Under the restructuring, the two 5.4375% semiannual interest payments will each be paid as 1¼% in cash and 4.1875% as payment in kind with the March payment due on the settlement date and the September payment to be made as scheduled.

In connection, the company also proposed to introduce additional covenants into the terms and conditions of the notes, including to restrict its ability to make restricted payments and investments, incur capital expenditure and liens and incur or repay indebtedness.

Waivers

The waivers sought under the extraordinary resolution relate to payment defaults that have occurred under the bank facilities under which the company or its restricted subsidiaries are obligors, including

• A buyer credit facility of up to €23,677,285.98 dated Aug. 9. 2013 among Avangardco Investments Public Ltd, as borrower, and Intesa Sanpaolo SpA London Branch, as lender, mandated lead arranger and agent. Under this facility, €20,932,316.97 is outstanding and €1,610,178.23 is currently overdue;

• A credit agreement dated Sept. 25, 2013 with UkrLandFarming as borrower and Export Development Canada as lender, under which $44,567,550.83 is outstanding and $4,996,011 in principal and interest is overdue; and

• A credit agreement dated June 24, 2011 with UkrLandFarming as borrower with Deutsche Bank Luxembourg SA as agent, under which $200,749,751.43 was outstanding on Dec. 31 and $163,259,432 in principal and interest was overdue.

None of the credit facilities have been accelerated, and the company does not expect that they will be, according to the announcement launching the consent solicitation. However, the missed payments triggered an event of default under the terms and conditions of the notes, meaning noteholders representing at least 25% of the outstanding principal of notes could instruct the trustee to accelerate the notes at any time.

The company said it was in talks with the facilities’ lenders and expected to achieve a restructuring of its payment obligations and waivers of the payment defaults in due course.

Noteholder consent was sought to approve the waiver of any event of default that has occurred or may occur that is directly attributable to a payment default under the three credit facilities, provided that the waiver would terminate on the earlier of Oct. 31, 2016 or the date of an acceleration.

Trustee switch

Noteholders also gave consents to replace trustee Deutsche Trustee Co. Ltd. with Global Loan Agency Services Ltd.

The company will pay a consent fee of $1.25 for each $1,000 principal amount of notes to noteholders who gave their consents by the deadline of 10 a.m. ET on April 19 or who gave their consents at the meeting. Payment of the consent fee is expected to occur on April 22.

D.F. King Ltd. (+44 207 920-9700 in London, 212 269-5550 in New York, 852 3953-7230 in Hong Kong or ulf@dfkingltd.com) was the tabulation and information agent.

UkrLandFarming is an integrated agricultural producer based in Nicosia, Cyprus, but focused on Ukraine.

© 2015 Prospect News.
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