Ukraine's MHP extends deadline in buyback offer for 2024 Eurobonds by two weeks

MOSCOW. Oct 30 (Interfax) - MHP Group, Ukraine's largest chicken producer, has extended the deadline for requests to buy back Eurobonds maturing on May 10, 2024 at a price of 75% of face value by two weeks, from October 26 to November 8.

The extension of the tender offer will enable the company to receive the funds it has requested from creditors, Ukrainian media reported, citing an exchange statement filed by the company.

The approximate settlement date on the bonds has therefore been postponed to November 10 from October 30.

MHP said that after the October 9 deadline for the offer to buy back the bonds at 85% of face value, it had not received new applications to buy back these bonds at 75% of face value. The initial amount of the bond issue was $500 million.

It was reported earlier that MHP Group's offer to buy back the Eurobonds at a price of 85% of face value was accepted by holders of bonds totalling $150.797 million or 30.2% of the outstanding amount of bonds.

MHP said earlier that it had reached a fundamental agreement with a number of international financial institutions and development organizations for up to $400 million in credit resources that it could use to finance part of the tender offer for the bonds. It was reported later that the European Bank for Reconstruction and Development and the International Finance Corporation will each provide $100 million and the U.S. Development Finance Corporation will provide up to $250 million.

The goal of the offer is to solve the problem of the company's debt on the bonds before they mature amid the ongoing conflict in Ukraine and the associated operational and financial risks in Ukraine, MHP said.

Prices for MHP's 7.75% Eurobonds maturing in 2024 rose from 67.96% to 83.37% of face value on the announcement of the buyback offer and reached 92.7% on October 26, but dropped back to 88.03% on the news of the extension, data from the Frankfurt Stock Exchange showed.

MHP said in its report for the first half of 2023 that it had $502 million in cash as of June 30, including $277 million held by group subsidiaries outside of Ukraine. However, under repatriation rules set by the National Bank of Ukraine (NBU), export revenues must be repatriated to Ukraine within six months, which limits MHP's ability to use this money to repay debt, the group said.

The group said Eurobond holders can now take advantage of its current potential liquidity, bolstered by the financing from international financial institutions and development organizations, and reduce exposure to risks associated with Ukraine before the bonds mature given that MHP cannot guarantee that this liquidity will continue and that the bonds will be redeemed on time.

MHP earned a net profit of $67 million in the first half of 2023 compared to a loss of $89 million in the same period of 2022. The group's revenue grew by 35% to $1.555 billion.

In addition to producing chicken, MHP also makes processed meat products, grows grains and produces sunflower oil. MHP's founder, majority shareholder and CEO is Ukrainian businessman Yury Kosyuk.