Subsidiaries of Ukraine's KSG Agro to raise $6 mln with debut bonds by year's end
MOSCOW. Sept 27 (Interfax) - Two subsidiaries of Ukrainian agribusiness group KSG Agro plan to raise a total of $6 million with corporate bond offerings before the end of this year.
Ukraine's National Securities and Stock Market Commission registered debut issues of interest-bearing unsecured bonds by the group's crop farming division KSG Dnipro LLC and pig farming division Strong Invest LLC at the end of August, Ukrainian media reported, citing a statement from KSG Agro on the Warsaw Stock Exchange on Tuesday. Both companies are fully owned subsidiaries of KSG Agro.
The hryvnia- and dollar-denominated bonds will be offered to a number of private investors in two rounds. The Series A round will be in September-October and the Series B round will be in November-December.
The bond issue will give the group additional financing to acquire new and replace existing farm machinery for planting grain crops, overhaul and renovate pig farms and purchase additional productive pigs, the company said.
The underwriter of the bonds will be Tascombank, KSG Agro's main creditor.
KSG Agro agreed on new financing terms with Tascombank last December that went into effect in the first quarter of 2023. They call for the group to gradually repay existing loans in order to receive new tranches, with the overall limit remaining unchanged. Annual interest rates are limited to 30% on tranches in hryvnia and 9% on tranches in U.S. dollars and euros. Most of the debt is now supposed to be repaid in December 2025, while under the previous terms the group was due to repay $9.568 million by the end of 2023.
As of the end of March, KSG Agro owed Tascombank the equivalent of $7.053 million on a hryvnia loan, down from $12.246 million a year earlier, and $4.054 million on a dollar loan.
KSG Agro is a vertically integrated group with operations in pig farming, as well as production, storage and processing of grains and oil crops. KSG Agro's principal owner is group chairman Sergei Kasyanov.