The European Bank for Reconstruction and Development (EBRD) and two other international development organizations have agreed to provide $480 million in financing to help MHP, Ukraine's largest chicken producer, refinance debt, boost output and expand its agricultural waste-to-energy facilities.
The US International Development Finance Corporation (DFC) is contributing $250 million to the package while the International Finance Corporation (IFC) is adding $130 million and the EBRD, the largest institutional investor in Ukraine, is adding $100 million.
MHP (LSE:MHPC), which says it's the biggest poultry producer in Europe and one of the largest grain producers in Ukraine, runs three broiler-raising farms and two poultry breeding operations, and grows sunflower, rapeseed, wheat and corn on 370,000 hectares.
MHP built its first biogas plant in 2014, with capacity of 5 MW/hour from chicken manure and slaughter waste, for an investment of $15 million. In 2019, it started building a second biogas complex with a targeted capacity of 12 MW/hour.
The DFC portion of the financing package includes a $250 million loan to refinance maturing debt, support poultry and grain production and storage, and support its export capacity.
The IFC’s funding includes a $30 million loan to upgrade and expand the biogas facility and a $100 million loan to help improve MHP's financial stability by refinancing its Notes due in May 2024. The financing is backed by a first-loss guarantee from the UK Foreign, Commonwealth & Development Office.
The EBRD said the $100 million it is providing to MHP is meant to "sustain its financial resilience through the refinancing of its Eurobonds at a time of limited access to capital markets."
Global depositary receipts of MHP on the London Stock Exchange have plunged since the Russian invasion of Ukraine, from as high as $8 each two years ago to Friday's close of $3.15. In the first half of 2023, the company posted a loss of $76 million, compared with a loss of $93 million in the same period of 2022.
