23 Oct 2023 15:25

Ukraine's Kernel agrees to payback date for loans of June 30, 2024

MOSCOW. Oct 23 (Interfax) - After negotiations that began in the spring of this year, Ukrainian agricultural holding Kernel has agreed with its creditors to extend the repayment period for principal amounts on all loans received before February 2022 for another year through June 30, 2024.

Until this date, the holding will pay only interest, Ukrainian media said with reference to an announcement from Kernel Holding S.A. on the Warsaw Stock Exchange.

"The waiver letters received are necessary to enhance the financial strength of the group until the specified period. The group expresses gratitude to its creditors for their continued support during these difficult times," the statement emphasizes.

Previously, Kernel had agreed to loan waivers until June 3, 2023, securing a deferment of any principal repayment, but paying interest.

The aggregate outstanding balance under the credit agreements currently subject to forbearance letters is $773 million. The Group, in consultation with its lenders, will also waive potential or actual defaults or events of default.

The required approvals have been obtained, in particular, for loans from Natixis PXF, ING PXF, the European Bank for Reconstruction and Development and the European Investment Bank, and other European and Ukrainian banking institutions, the announcement said. In addition, one creditor has already agreed to the full repayment of obligations at a proposed discount rate of 25%.

"The Group confirms its commitment to repay all coupon payments on Eurobonds and ensure timely payment of interest on all credit lines," the holding emphasizes.

The forbearance letters set out a number of conditions imposed by lenders, including the continuation of necessary capital expenditures to maintain ongoing operations. Kernel noted that on September 1 it fulfilled one of the conditions, an additional injection of $60 million from shareholders.

Meanwhile, the additional issue of shares, mainly bought by majority shareholder Andrei Verevskiy, was criticized by minority shareholders for the low sale price of shares and will likely be challenged in court.

Earlier in its reporting, Kernel indicated that as of July 31, 2023, it had $1.445 billion in debt (the principal amount of bank loans and Eurobonds, excluding accrued interest and leasing obligations), $1.148 billion in cash and cash equivalents and $327 million in inventory.

Ukrainian businessman Verevskiy, as part of the repurchase of the holding's shares and delisting from the Warsaw Stock Exchange, increased his stake this year from 41.3% to 74.05%. Based on the results of the additional issue, his share is estimated at approximately 93.7%.

Kernel is one of the largest producers and sellers of bottled oil in Ukraine, is a major producer and exporter of sunflower oil, and is also engaged in the cultivation and sales of agricultural products.