Trigon Agri, 11% bondholders enter blocked account release agreement

By Caroline Salls

Pittsburgh, March 23 – Trigon Agri A/S entered into an agreement with a committee of holders its SEK 350 million 11% bonds under which €1.5 million will be released to Trigon from a blocked account that currently serves as security for the holders of the bond loan, according to a news release.

Trigon said a SEK 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.

Trigon said it will be obliged to repay €1.5 million to the blocked account if all applicable conditions are not fulfilled by May 17.

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.

Redemption proposal

The company said it will hold a meeting of bondholders or initiate a written procedure in accordance with the bond loan to resolve a partial redemption of the bond loan by a SEK equivalent of €6 million and to confirm that the redemption payment will be in kind and consist of one share in the new Swedish company per bond held.

The new Swedish company will not conduct any business and is expected to change its name to TBHV Holding AB.

Trigon said it will be obliged to repay €1.5 million to the blocked account if the bondholders have not agreed to the proposals by April 28.

Convertibles issue

The company said its board of directors has decided to exercise its authority to issue convertibles. As a result, special purpose vehicle receivables will be amended to convertibles once the shares have been distributed to bondholders, provided that the Danish FSA has confirmed that the obligation for the new Swedish company to make a mandatory tender offer for the shares of Trigon does not apply or has been waived.

The convertibles will be issued at a price equivalent to their face value, in total €6 million. The maximum increase in share capital upon full conversion to shares will be €1.95 million.

If the new Swedish company does not exercise its right to convert the convertibles into new Trigon shares, Trigon will be obligated to repay €6 million on Sept. 30, 2017.

The company said there are no plans to list the new Swedish company in the subscriber on any marketplace.

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

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