Ekosem-Agrar plans to restructure corporate bonds, sets meeting

By Marisa Wong

Los Angeles, April 8 – Ekosem-Agrar AG plans to restructure its corporate bonds, the ESA bond 2012/2027 (ISIN: DE000A1R0RZ5) and the ESA bond 2019/2029 (ISIN: DE000A2YNR08), according to a news release.

The company is inviting noteholders to vote on the sale of the bonds at a price of €300 per €1,000 bond.

The proposed price is more than 165% above the respective average prices for the first quarter of 2024, the company noted.

Ekosem-Agrar is inviting noteholders to a meeting on May 2 in Wiesloch to explain the background to the proposed measures and the adjustment of the respective bond terms and conditions and for the purpose of passing resolutions.

The company cited geopolitical factors as the reason for the proposed restructuring. The geopolitical situation as well as legal and administrative regulations make it extremely difficult for the German parent company to cooperate with its operating subsidiaries in Russia, according to the release.

Management plans to merge the German holding company with the operating business, which is based exclusively in Russia. To this end, shares held by German companies in the Russian intermediate holding companies would be sold to a Russian acquiring company. The current shareholders of Ekosem-Agrar will essentially hold the shares in the acquiring company. In this case, the company is asking the noteholders to waive the repayment option in the event of a change of control.

In addition, talks are being held with potential equity investors in Russia who intend to invest up to €100 million in the acquiring company. All investors are making their investment subject to the proposed restructuring of the bonds and the sale of the intermediate holding companies to a Russian company.

Stefan Duerr, chief executive officer of Ekosem-Agrar, explained in the release, “We believe that the proposed sale of the bond is a good, albeit painful, opportunity for the noteholders in view of the general conditions.

“In our view, the proposed restructuring and the merger of the holding company with the operating subsidiaries in Russia, from where the group is managed anyway, are the right steps to preserve our operating business and ensure the group’s continued existence.

“Our bonds have been an important financial pillar in building up our business since 2012, combined with an attractive return for our noteholders. With political developments still uncertain, we believe a sale of the ESA bonds at a price of more than 165% above the average prices in the first quarter 2024 is an attractive offer for investors to recover at least parts of their original investment.”

e.Anleihe GmbH (+49 711 184 2923 – 1; ekosem@elsaesser.co) is the joint representative appointed for both corporate bonds, as well as the noteholders’ advisory committee constituted in 2022, consisting of larger investors and a representative of Schutzgemeinschaft der Kapitalanleger eV (SdK).

e.Anleihe and the SdK separately invited all interested noteholders to a webcast to explain their view on the proposed measures in further detail. The virtual information event will be held on April 10.

Ekosem-Agrar is the German holding company of Russian milk producer EkoNiva Group.

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