Sayenko Kharenko advised Mriya Agro Holding and Hogan Lovells advised the company's ad hoc committee of note-holders on the restructuring of its USD 1.1 billion debt, and the two firms advised the company on its subsequent September 12, 2018 sale of the company's assets, including infrastructure facilities, machinery and land lease rights, to the Saudi Agricultural & Livestock Investment Company United Kingdom. Redcliffe Partners advised SALIC on the matter.
Latham & Watkins advised the bank creditors on the restructuring, and as previously reported, Dentons advised the joint liquidators.
SALIC UK is a Saudi joint stock company that is owned by the Public Investment Fund of the Kingdom of Saudi Arabia. Its statutes state that its activity is in the field of investment in agricultural and livestock production in countries that have a competitive advantage in contributing to the production of selected foods and their availability for export markets. The SALIC strategy focuses on twelve product categories: wheat, barley, corn, soybean, rice, sugar, vegetable oils, green fodder, red meat, milk products, poultry and aquaculture.
Mriya Farming PLC is the parent company of the Mriya Group, which farms 150,000 hectares in the Ternopil, Khmelnitsky, Chernivtsi, Ivano-Frankivsk, L’viv and Rivne regions. The Mriya Group operates four modern silos with a total capacity of 380,000 tons, a potato storage facility with a total capacity of 52,000 tons, a seed plant and a potato starch plant. It specializes in growing wheat, rapeseed, barley, sunflowers, soybean, corn, sugar beet, potatoes and other crops
According to Sayenko Kharenko, "the deal involved not only billion dollar debt restructuring, but also a complex corporate reorganization of the Mriya Group. In accordance with Western standards, an independent board of directors was appointed. Within this reorganization, Mriya Group’s creditors became shareholders of Mriya Farming Plc, the Mriya Group’s holding company. The successful restructuring was followed by the subsequent sale of Mriya Group’s Ukrainian farming assets including infrastructure facilities, machinery, and companies leasing agriculture land plots to the Saudi Agricultural and Livestock Investment Company, United Kingdom. Upon sale completion, Mriya Agro Holding, as one of the largest agro industrial companies in Ukraine, will continue to operate in Ukraine alongside SALIC’s subsidiary, Continental Farmers Group."
The restructuring involved the consolidation into a single secured debt instrument of 13 unsecured bank credits, seven suppliers’ credits, an ECP program, and two Eurobond issues. According to Latham & Watkins, as a result of the restructuring, "the total debt of the new Mriya group has decreased from USD 1.1 billion to USD 309.5 million, consisting of USD 49.3 million restructured secured debt, USD 208.1 million restructured unsecured debt, USD 46 million working capital notes, and USD 6.1 million new equipment leasing. The company will be serving the restructured unsecured debt according to the agreed schedule of interest and principal payments of the new senior secured notes issued in accordance with the terms of the Exchange Offer."
Ton Huls, Chief Financial Officer of Mriya Agro Holding, described the restructuring as "an unprecedented and unique process." According to Huls, "the group had dozens of creditors at different levels in numerous jurisdictions. We had to ensure fair and equal treatment for all creditors, both Ukrainian and international, and find a universal solution acceptable for all of them. For us, it was important to achieve transparency and efficiency, and that had to be done in the heavily regulated legal environment of Ukraine and other jurisdictions. I believe that the final deal structure we have worked out together with English legal counsel, Rothschild, and Sayenko Kharenko has achieved these objectives.”
The Sayenko Kharenko team advising Mriya Agro Holding was led by Partners Anton Korobeynikov and Alina Plyushch and included lawyers from the firm's Banking and Finance, Corporate, Bankruptcy and Debt Restructuring, Litigation, and Competition practices.
The Hogan Lovells team was led by Partner Alex Kay, supported by Partner Derek Meilman, Sylvain Dhennin, Philip Harle, Counsel Karla Dudek, Senior Associate Celine Buttanshaw, Hannah Wilson, Jill Barraclough, Christopher Hyde, Associates Jonathan Morris, Jennifer Lowe, Fadzai Mandaza, Philip Schuster , Adela Komorowska, and Fergus Kent, and Trainees Louise Pederson and Zachary Tan.
The Redcliffe Partners team advising SALIC on the sale was supervised by Partners Dmytro Fedoruk and Rob Shantz and led by Counsel Zoryana Sozanska-Matviychuk, assisted by Senior Associates Anna Pushkaryova and Nataliya Kovalyova, Associates Olesia Mykhailenko and Yulia Brusko, Junior Associates Anton Rekun and Bogdan Nykytiuk.
The Latham team was led by London Partner Helena Potts, Moscow Partner Ragnar Johannesen, and Moscow Counsel Edward Kempson, supported by London Associate Shamsun Nahar and Moscow Associate Vladimir Mikhailovsky.
Editor's Note: After this article was published Asters announced that it had advised the International Finance Corporation in connection with its restructuring deal with the Mriya group. The firm reports that its assistance "covered multiple dimensions, including developing the legal and tax models of the deal, evaluation of different options, negotiating the proposed models on behalf of the IFC, representing the IFC in the Ukrainian enforcement and bankruptcy proceedings, developing complex contractual settlement mechanisms and assisting the parties with the antitrust clearance."
The Asters team was led by Partner Iryna Pokanay and included Counsel Gabriel Aslanian, Associates Vitaliy Kornev, Inna Bondarenko and Anatoliy Donets. Partner Konstyantyn Solyar and Senior Associate Marina Golovko worked on tax elements, and Partner Alexey Pustovit and Associate Olena Tsygulska handled antimonopoly matters.