MHP subsidiaries provide guarantees for potential new bond issue of up to $1 bln

 MHP, an international food and agrotechnology company that must redeem $550 million in Eurobonds in April this year and has announced plans to refinance them in the first quarter, has begun a preparatory process for a possible new bond issuance.

According to disclosures by its subsidiaries – PrJSC Myronivska Poultry Farm, Grain Product MHP, Agroforth, and Oril-Leader – published in the National Securities and Stock Market Commission's disclosure system, on January 8 their shareholders approved the provision of guarantees to MHP Lux S.A. for bonds that may be issued and placed by that company on international capital markets with a total principal amount of up to $1 billion, an interest rate not exceeding 25% per annum, and a maturity of no more than five years.

It is envisaged that the London branch of Citibank, N.A. will act as trustee, while J.P. Morgan SE will serve as lead manager.

In addition, on January 9 the shareholders' meeting of PrJSC MHP approved various agreements that may be entered into in connection with raising financing and/or refinancing (including, but not limited to, the issuance, additional issuance, repurchase, exchange and/or amendment of the terms of issuance of debt securities, shares, derivative securities, financial derivatives and/or other financial instruments on domestic and/or international capital markets) by MHP SE (Cyprus) or MHP Lux S.A.

As reported, in mid-December MHP stated in its third-quarter report that it continues to adhere to a prudent debt management strategy to ensure the timely fulfillment of its obligations.

"As of the date of publication of these consolidated financial statements, management is actively assessing available alternative financing options and plans to begin implementing a refinancing plan for the senior notes bearing an interest rate of 6.95% during the first quarter of 2026," MHP noted.

The company added that it has a solid track record of fully and timely meeting its debt obligations and maintains constructive relationships with bondholders and other creditors.

"Management is focused on ensuring their timely servicing as part of the Group's overall debt management strategy. Depending on the financial strategy adopted for the repayment of the bonds maturing in April 2026, the interest rate may differ from the existing terms, which may lead to corresponding changes in future undiscounted cash flows…," the report also said.

According to the report, as of September 30, 2025, MHP's net debt amounted to $1.529 billion, compared with $1.179 billion at the beginning of the year, while adjusted EBITDA for the last 12 months (excluding IFRS 16) increased to $586 million from $566 million at the start of the year.

The report also said that as of the end of September this year, the company had $463 million in cash, compared with $355 million at the beginning of the year.

The early redemption date of MHP's large $500 million eurobond issue fell on May 10, 2024. At that time, in September–December 2023, the company announced tenders for the early buyback of its securities and initially managed to repurchase $150.8 million at 85% of face value, followed by $138.1 million at 95% of face value.

At the same time, MHP succeeded in reaching agreements with a number of international financial institutions on financing that could be used for buybacks: the European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC) of the World Bank Group each announced allocations of $100 million, while the U.S. International Development Finance Corporation (DFC) committed up to $250 million.

MHP is the largest poultry producer in Ukraine. It farms 360,000 hectares across 12 regions of Ukraine and is engaged in the production of grain, oil, and meat products, which it exports to more than 80 countries.

The agroholding's production facilities are located in Ukraine and Southeastern Europe, and it also operates subsidiaries in the Netherlands, the United Kingdom, the UAE, Saudi Arabia, and EU countries.

MHP's revenue for January–September 2025 increased by 16% to $2.635 billion, while net profit rose by 52.5% to $215 million.

According to the Frankfurt Stock Exchange, MHP's eurobonds issued via MHP Lux S.A. and maturing on April 3 this year rose by 0.22% on Tuesday to 95.20% of face value, close to their highest valuation since late 2021, while the bonds maturing in 2029 declined by 0.19% to 86.08%.