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Trigon Agri investors agree 11th-hour deal to slash debt burden

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Trigon Agri investors agreed an 11th-hour deal to prevent lenders from pulling the plug on the struggling former Soviet Union farm operator, and give the group a "fresh start".

Investors holding 62% of bonds in Trigon Agri agreed to convert their debt, and accrued interest, into shares in the company, ending long-running talks over a way of easing the group's large debt burden.

The deal, also agreed by holders of 31% of shares in the company, would see the bondholders gain an initial 92.5% stake in Trigon Agri, although this stands to fall to 82.5% should shares in the group not collapse.

The deal will also see shareholders handed warrants over stock equivalent to a 10% stake, and with strike prices of SEK0.22 and SEK 0.30 – making it worthwhile exercising the warrants as long as the shares are trading above these levels.

Trigon Agri shares stood at SEK0.325 in morning deals in Stockholm, a 3.3% decline on the day.

Looming bank deadline

The agreement, which to be enacted requires the backing of a formal investor meeting to be held in the October-to-December quarter, would slash Trigon Agri's debts by more than E50m to E14.2m, with most of the remaining borrowings comprising working capital needs.

And the announcement narrowly avoids the company missing a deadline which would have seen banks withdraw their support.

Simon Boughton, the Trigon Agri chief executive, warned two weeks ago that the group could lose working capital support from its Ukrainian banks if bondholders and shareholders proved unable "to demonstrate real actions facilitating the restructuring process of the bonds by the middle of September".

Mr Boughton said on Wednesday that the "sensible" deal struck with investors would "dramatically reduce the liability and strengthen our balance sheet, and give the business a fresh start.

"We are looking forward to the challenge of focusing on developing the company and delivering value to all our stakeholders going forward."


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