Ekosem-Agrar AG Announces Plans for Bond Restructuring Amidst Geopolitical Challenges

Ekosem-Agrar AG, the German parent company of the Russian EkoNiva Group, has disclosed its intention to restructure outstanding corporate bonds, citing the geopolitical landscape and regulatory hurdles as major factors complicating its operations in Russia. Offering a purchase price of EUR 300.00 per bond, significantly above the Q1 2024 average, the company aims to address the challenges head-on. This announcement accompanies the revealing of preliminary financial results for 2023, with sales revenues and EBITDA showing a notable decline mainly due to currency fluctuations and increased production costs.

The restructuring plan includes the sale of bonds and a strategic merger of the German holding with its operational entities in Russia. The sale of German stakes in Russian subsidiaries to a local entity is highlighted as a core component of this strategy. Additionally, negotiations with Russian investors for potential injections of up to EUR 100 million are underway, contingent upon the successful restructuring of the bonds.

Despite the steps taken towards restructuring, the preliminary figures for 2023 reflect a downturn, with sales revenue and EBITDA expected to be significantly lower than the previous year. However, the company remains optimistic about a financial upswing in 2024, albeit still beneath 2022 levels. A noteholders' meeting is scheduled for May 2, 2024, to deliberate on the proposed adjustments and the way forward. Ekosem-Agrar AG reiterates its commitment to sustaining its operational footprint and ensuring its longevity amidst uncertain political developments.