Agroton not to leave Eurobond book open until Friday due to low demand - source
KYIV. May 18 (Interfax) - Agroton, one of Ukraine's largest vertically integrated agricultural producers, will leave its bid book for a Eurobond placement open until Friday due to low demand, a market source told Interfax.
The source said investors were cautious about non-standard terms for a public offering.
Many investors think the company will either cancel the offer alter its terms, downsizing it and possibly turning it into a private offering.
Reports have said the company could place $100 million in notes.
VTB Capital plc and Dragon Capital (Cyprus) Limited are Joint Lead Managers and Jaspen Capital Partners is Co-Lead Manager for what is Agroton's debut dollar-denominated Reg S Eurobond issue. The investor road-show commenced on May 10, 2011.
The proceeds from the bonds will be used to redeem all existing bank debt of around $21 million and fund the construction of additional grain storage facilities, expansion of the Group's existing land bank and acquisition of additional agricultural machinery as well as for general corporate purposes of the Group. Future cash from the bond proceeds will be deposited initially in Bank of Cyprus.
Fitch Ratings has assigned Agroton Public Limited's planned notes foreign-currency senior unsecured rating of 'B-(exp)' and an expected Recovery Rating of 'RR4'. Agroton has Long-term foreign and local currency Issuer Default Ratings (IDR) of 'B-' and a National Long-term of 'BBB(ukr)'. The Outlook on these ratings is stable.
Standard & Poor's Ratings Services has assigned its 'B-' long-term corporate credit rating to Agroton Public Ltd. The outlook is stable. At the same time, Standard & Poor's assigned an issue rating of 'B-' to Agroton's proposed senior unsecured notes.
Agroton's core business is the cultivation, processing, storage and sale of grain, chiefly sunflower and wheat. The company also handles production and sale of livestock as well as food production.
Agroton has been listed on the Warsaw Stock Exchange since November 2010.