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EBRD, IFC, DFC lend $480 million to Ukrainian chicken grower MHP to refinance debt, expand output

MHP HQ. (Company photo)

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.

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