Investors in Ekosem-Agrar GmbH are to vote on a four-year extension to the terms of two bonds. Creditor meetings are taking place on March 16 and 17.
GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London conclude – Ekosem-Agrar GmbH has issued two SME bonds: Bond 2012/17 (ISIN DE000A1MLSJ1) has an issue volume of 50 million euros, a term of five years with an annual interest rate of 8.75 per cent, and is due for repayment in March 2017; Bond 2012/18 (ISIN DE000A1R0RZ5) has an annual interest rate of 8.5 per cent and its term runs until December 2018. Its issue volume is 78 million euros.
The company now wishes to extend the term of each bond by four years whilst retaining the same interest rate. Since the first vote which took place without holding a meeting failed to meet the quorum requirement, the investors are set to decide on the term extensions in creditor meetings taking place on March 16 and 17. By its own account, the company hopes that this will enable it to maintain its financial flexibility for the purposes of concluding its investment programme to expand its dominance in Russia’s milk market and run its dairy farm facilities to capacity. For the investors, extending the terms also means that their risk will be prolonged by four years. In this situation, they can turn to a lawyer who is competent in the fields of banking law and capital markets law for advice.
It ought to be noted that international relations with Russia continue to be problematic. Furthermore, the Russian rouble has lost a substantial proportion of its value, with the low oil prices, among other things, contributing to the rouble’s exchange rate collapse. This trend could result in foreign exchange losses for Ekosem Agrar GmbH. It is also unclear whether the company will succeed in utilizing its dairy farm facilities to capacity. These developments entail a significant risk potential, including for the investors, who should therefore have their legal options carefully examined to avoid any potential financial losses.
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