• Farm group restores $1.25 million lease with Raiffeisen Aval
  • CEO reorganizing company after default on about $1.2 billion

Mriya Agro Holding Plc has renewed leasing programs with local banks, in a sign that the Ukrainian farm company’s finances are on the mend after last year’s default on about $1.2 billion in debt, Chief Executive Officer Simon Cherniavsky said.

Mriya, which is raising financing for tractors and equipment amid a rush to complete winter planting, restored a $1.25 million leasing agreement with Raiffeisen Bank Aval, Cherniavsky said in phone interview from Kiev last week. The deal is a sign of renewed trust in the company, said the chief executive, who was appointed in February.

“This is restoring Mriya’s old relations” with creditors, Cherniavsky said.

Mriya’s bondholders and lenders opened a six-month $25 million working capital facility in June to finance the harvesting and planting of wheat, rapeseed and other crops. The deal was hailed as among the first with private international investors since war broke out in the country’s eastern regions last year. The conflict has led to an economic slump and currency collapse, which has forced Ukraine’s government and several companies to seek debt-restructuring talks.

Rapeseed, Wheat

Mriya, which invested about $8 million this year, will need as much as $10 million for tractors and other equipment for next year, within a total financing need of $54 million, Cherniavsky said. His plan for 2016 is to optimize the company’s structure to improve transparency and control over operations, he said.

“We already have a certain vision among creditors and we are actively negotiating,” Cherniavsky said. "The main task is to reach an agreement in the two coming months.”

Mriya is around 10 days late with the winter planting of around 21,000 hectares of rapeseed and 65,000 hectares of wheat because of dry weather in the autumn. The company sees its crop production at 373,000 tons in the marketing year ending in June, according to a company presentation. Earnings before interest, tax, depreciation and amortization is expected at $28 million in the period.

The 2015 harvest has already been contracted for export as the company has to repay debt to creditors by the end of the year via such instruments, Cherniavsky said. He expects global commodities prices to stay around present levels in the next two years.

“I concentrate on fixing what I took over," Cherniavsky said. "At the moment we have a good control of the company.”

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