ULF confirms ability to pay interest on debt in 2015

ULF confirms ability to pay interest on debt in 2015



4 листопада 2015 года
Конкорд Капитал

Ukrlandfarming (ULF, UKRLAN) will pay USD 150 mln in 2015 totally to creditors in interest and other payments, having already paid USD 130 mln this year, Deputy CEO Ihor Petrashko announced on Nov. 3. Talks on restructuring the holding’s Eurobonds (due in 2018) are premature and ULF doesn’t plan to convert its debt to equity, he said. The company plans to start construction of a seaport terminal in 2016, he added.

In mid-October, the main ULF shareholder, Oleg Bakhmatyuk, announced that the company was close to reaching an agreement with creditors on a syndicate loan. The company should have paid USD 100 mln to Deutsche Bank and Sberbank in 2015 out of a total syndicate loan of around USD 200 mln.

Roman Topolyuk: We conclude from Petrashko’s message that ULF is only paying this year interest and commissions on its debt, not the principle itself. The holding’s total interest payments in 2014 were USD 157 mln and should be close to this figure in 2015 as well. The company is unlikely to generate enough free cash flow to repay its debt, totaling USD 1.6 bln, as its forward total debt-to-EBITDA is above 5x, we estimate. On the flip side, as long as ULF keeps servicing its debt, its bonds will be of some interest to the market. The smooth repayment of UKRLAN’s Eurobond in 2018 is only possible in case the holding refinances it.

Regarding the development of its seaport terminal, ULF is indeed one of the largest owners of land plots at the Yuzhny port, the biggest in Ukraine. However, the financing of this project needs to be structured outside of ULF’s balance sheet, we believe, so the mid-term potential benefits from operating the terminal for ULF will be minor.

Источник: Конкорд Капитал

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