15 Dec 2023 10:28

MHP makes new offer to buy back 2024 Eurobonds at up to 95%

MOSCOW. Dec 15 (Interfax) - Leading Ukrainian chicken producer MHP Group, which bought back 30.2% of a Eurobond issue maturing on May 10, 2024 at a price of 85% of face value in November, has made an offer to the holders of the remaining $349.2 million in outstanding bonds to repurchase them at 95% of face value.

After the offer made in the fall, the MHP continued to maintain a dialog with its bondholders, in the course of which the group received an expression of interest from holders of more than 10% of the current outstanding principal debt to sell their bonds to the group for cash, Ukrainian media reported, citing a statement the company filed on the Irish Stock Exchange.

MHP said it therefore decided to extend the offer in order to give all bondholders the opportunity to take advantage of the group's current liquid position.

The deadline for requests to buy back the bonds at 95% of face value is 5:00 p.m. New York time on January 4, after which the offer price will be reduced to 85% of face value until January 19. Payments are expected to be made on or around January 23.

MHP said it plans to buy back the bonds with financing provided for this purpose by international financial and development institutions, as well as its own resources.

MHP also said that after the completion of the first buyback, which was announced on September 25 and concluded on November 10, the market price of the group's bonds rose significantly and they are now consistently trading at more than 90% of face value.

In the earlier tender offer, the buyback price was 85% of face value in the initial stage and 75% thereafter. However, in the second stage MHP did not received any new applications to buy back bonds at the lower price, despite an almost two-week extension of the initial deadline.

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 financing that it could use to buy back for the bonds. It was reported later that the European Bank for Reconstruction and Development and the International Finance Corporation would each provide $100 million and the U.S. Development Finance Corporation would provide up to $250 million.

Prices for MHP's 7.75% Eurobonds maturing in 2024 rose to 93.68% from 92.16% on the Frankfurt Stock Exchange on the announcement of the new tender offer. Prices for the bonds rose from 67.96% to 83.37% of face value on the announcement of the first buyback offer and reached 92.7% on October 26, but dropped back to 88.03% on the news of the postponement of payments, though they later recovered to 91.5%, data from the 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.

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.