Creditors to Ukraine's Largest Poultry Firm Grant It More Time to Pay Interest

(Bloomberg) -- Creditors to Ukraine's largest poultry producer MHP SE agreed to grant the company nine months to make interest payments on $1.4 billion of bonds.

A majority of bondholders voted in favor of a 240-day extension to the 30-day grace period, the company said in a statement on Wednesday. MHP won't be able to raise more debt and will have restrictions in using its cash in this period.

Ukrainian companies have been seeking to save cash after Russia invaded the country in February, disrupting their business. MHP skipped a coupon payment on March 19 as it preserved liquidity ahead of a sowing campaign, while seeking to extend $126 million of short-term bank lines. Kernel Holding SA, another Ukraine-based farming company, is in talks with its bank lenders to postpone loan repayment through to September. 

“We have had enormous support from all stakeholders,” John Rich, executive chairman of MHP, said in a phone interview with Bloomberg. “Now the key thing for MHP is to plant its crops. We are going to be planting spring crops and harvesting the winter crops we have in the ground.”

Ukraine's Biggest Poultry Firm Resumes Exports as War Rages

All three of MHP's dollar bonds, downgraded to default level by S&P Global Ratings last week, are indicated at about 45 cents on the dollar on Thursday. 

MHP has already started the sowing campaign on parts of its land, Chief Financial Officer Viktoria Kapelyushnaya told Bloomberg on Thursday.  

“We have started sowing in some territories and in about one week we will start everywhere,” she said. “Everything is going well.”

The company had $228 million of cash on its balance sheet as of March 21, and the amount is now “only slightly lower,” she said.

The company is in the process of restarting exports, resorting to trucks as the conflict with Russia cut the company off from its usual seaborne shipment routes.

MHP has 1,500 of its male workers, roughly half of total staff, involved in Ukraine's defence, Kapelyushnaya said. Female workers are now carrying the weight of the company's day-to-day operations.

“We don't talk about five-day working weeks, but seven-day working weeks,” she said. “Everybody understands the need to work more.” 

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