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mid-term growth," he wrote in the note.
Ukrainian agribusiness Ukrlandfarming offers 50%-70% haircut to creditors Leading Ukrainian agribusiness Ukrlandfarming is going to update its debt restructuring proposal for all its creditors, deputy CEO Ihor Petrashko told the Interfax-Ukraine news agency on November 5.
The company will base its offer on its forecasted cash flow, which the company will update by the end of 2018, he said. The company’s last offer assumed a 70% haircut for unsecured creditors and 50% for secured, he said, as well as extending the loans for ten years at an interest rate of 8%. “Most international creditors are not happy with that, but they treat it with understanding because this is an objective reality,” Petrashko commented. He also said ULF's total debt is close to $2bn, of, which the principal amount is about $1.6bn.“The restructuring terms that the company is offering are slightly better than what we estimated in our July 4 report on ULF (65% haircut, on average, paying 3.0%-6.5% interest in ten years). In our view, ULF’s ultimate offer should follow not only a revision of its business model, but also some deal between major shareholder Oleg Bakhmatyuk and Ukraine’s state bodies, to whom he owes about $0.5bn of debt that is not captured by the ULF balance sheet,” Alexander Paraschiy of Concorde Capital said in a note. In any case, the offered ULF restructuring parameters imply a better recovery rate than was earned, on average, by the creditors of agricultural holding Mriya. In particular, we estimated that – assuming a 25% discount rate – ULF creditors would have an NPV of debt flow close to 11% of par (based on our assumptions, or slightly more based on the announced offer), while Mriya's unsecured creditors will receive about a 7% recovery rate.”
Ukrainian farming company and leading sugar producer Astarta generated €253.5mn net revenue in 9M18 , according to its November 8 report. “This is a 27% y/y decline and 2% below our estimate. Revenue in its core segments, sugar and crop sales, dropped 38% y/y and 28% y/y, respectively. The company’s EBITDA fell 39% y/y to €68.1mn in 9M18, being 9% below our estimate. The company’s bottom line plunged 80% y/y to €14.5mn,” Concorde Capital said in a note. The poor results mean the company has breached some of its covenants on its debt, which will unsettle investors. “Astarta’s total interest-bearing debt rose 42% YTD to €206.7mn as of end-September, while its short-term debt doubled YTD to €201.3mn. The company attributed the short-term debt surge to reclassification of €82.3mn from long-term debt “due to deviation from certain financial covenants.” Its net debt swelled 47% YTD and net debt-to-LTM EBITDA ratio jumped to 2.50x as of end-September 2018, from 1.1x as of the year’s start,” Concorde added. The company also reported the interim results of its oilseed harvest, with its soybean yields being higher 33% y/y (2.91 t/ha) and sunflower yields being 27% better y/y (2.93 t/ha). Based on this data, as well as the results of its ongoing corn harvesting campaign, Astarta expects its total harvest of grains and oilseeds will reach 1mmt this year, which will be a record high (last year, its total harvest amounted to 0.79mmt). “Due to weak sugar prices this year and Astarta’s weak harvest of the previous year, its P&L is expectedly weak in 2018. We were expecting some better profit to be reported in 9M18 due to higher revaluation of Astarta’s new harvest, but this did not happen. Otherwise, the company’s financials are broadly in line with our estimates. Due to expected bumper harvest in 2018, we see Astarta will improve its revenue and profits in its grain segment in the fourth quarter of 2018 and early 2019, while still weak sugar prices will unlikely allow the company to show significant improvement in overall profit in the coming quarters,” Alexander Paraschiy of
71 UKRAINE Country Report December 2018 www.intellinews.com