Mriya Agro Holding


Mriya Agro Holding was one of the largest agroindustrial companies in Ukraine founded in 1992. Mriya cultivated approximately 165,000 hectares of land in Ternopil, Khmelnytskyi, Ivano-Frankivsk, Chernivtsi, Lviv, and Rivne regions. The Agro Holding grew wheat, potatoes, rapeseed, corn, sunflower, soybeans, barley, and sorghum. In August 2014, the company failed to pay its creditors and announced a technical default. Starting February 2015, control over the company's assets was transferred to the creditors, primarily European and American investors who decided to preserve the Agro Holding and to appoint a new management team. New management consisted of General Director Simon Cherniavsky, CFO Ton Huls, and COO Victor Kuharchuk. In September 2018, Mriya was acquaired by Saudi Agricultural and Livestock Investment Co.

History

1992–1995: Early years

Mriya was founded on April 17, 1992 by Ivan and Klavdiya Guta. The company began
as a farming research and production enterprise and received land from the
State Reserve Fund of Ternopil region. The total arable land amounted to 50
hectares.
In 1994, the company expands its land bank to 150 ha and begins cooperation
with American experts in order to acquire its first international experience in
agriculture.
In 1995, the company implements advanced potato cultivation technologies
and in the same year upgrades potato storage facilities located in Vasylkivtsi
village, Ternopil region. Eventually, all potato storage facilities are
equipped with temperature and humidity control systems as well as sorting
lines.

1996–1999: Implementation of advanced technologies

Starting 1996, the company invests in modern agricultural equipment; in
1996 it makes first purchases of equipment produced by John Deere and Grimme.
In 1997-1998, Mriya expands its land bank to more than 1,000 ha. The company
pays special attention to developing infrastructure; the first silo with
capacity of 3,500 tons is built in Gusyatyn region.
In 1998-1999, Mriya launches partnership with Ukrayinska Mova company to supply potatoes for production of
potato chips. The company also signs an agreement with Slavuta Malt Plant to supply high quality barley for malt
production.

2000–2006: Further development

In 2001, the company launches its own school for agronomists to invest in
professional development of its employees and introduce experience exchange
with international experts. “Mriya” also creates its own equipment fleet
consisting of large vehicles produced by world's leading automotive companies.
In 2002-2006, the company destroys its management team with Andriy and
Mykola Guta, sons of the founders of “Mriya”. Construction of a second elevator
in Gusyatyn begins; the company's land bank grows to 10,000 ha. Long-term
partnership with Europe's leading agricultural consulting company Velcourt is
launched.

2007–2009: Infrastructure development

In 2007, the company's land bank amounts to 91,000 ha.
In 2008, Mriya expands its land resources to 150,000 ha. Gusyatyn elevator's
capacity is further increased to 77,000 tons. The company conducts a private
placement of 20% of its shares on the Frankfurt Stock Exchange.
In 2009, Mriya completes the first stage of construction of an elevator
with a storage capacity of 60,000 tons. Seed production and treatment facility
with a production capacity of 300 tons per day is launched. Land bank is being expanded to 201,000 ha.

2010–2011: International cooperation and further infrastructure development

In 2010, Mriya receives a credit loan from International Finance Corporation
. GPS monitoring of equipment is introduced. A large potato storage
complex is built.
In 2011, Mriya expands its land bank to 240,000 ha and issues $250
million of Eurobonds. Mriya also establishes the “Ukrainian Agrarian School”,
an education center aiming to teach agronomists.

2012-2013: Attracting capital from international markets, investing into production facilities, research, and supporting local communities

In 2012, Mriya Agro Holding expands its land bank to 298,000 hectares,
its grain and oilseeds storage capacity to 820,000 tons, and its potato storage
capacity to 116,000 tons. The company also begins processing potato waste into
starch.
In 2013, the company issues $400 million worth of Eurobonds. Mechanic
School, Ukrainian Accounting School, and Agro MBA are established.

2014: Technical default

In August 2014, Mriya announces a technical default. The company's debt amounted to US$1.3 billion.
Mykola Guta, the son of the founders and co-owners of Mriya Agro Holding, Ivan Guta and Klavdiya Guta was suspected of fraud by the Ukrainian authorities. In 2015 Interpol put him on its wanted list. On 5 November 2018 Mykola Guta was extradited from Switzerland to Ukraine., UNIAN

2015: New management. Debt restructuring

In January 2015, creditors of Mriya hold negotiations to select a new
management.
The creditors are represented by two committees, one of which represents
the interests of bondholders – around 50% of bonds to be repaid in 2016 and
2018 – and the other representing the interests of banks. Both creditor committees, which account for the
bulk of “Mriya’s” debt arrears hire legal advisors
as well as a consortium of financial advisors consisting of Rothschild, ICU and
FinPoint. The aforementioned committees were formed in response to the
Company's statement on August 1, 2014, which urged the creditors to unite.
The creditors select Simon Cherniavsky, former General Director of
HarvEast agro holding, as the new General Director; Ton Huls as the CFO; and
Viktor Kukharchuk as the COO.
In June 2015, Mriya Agro Holding manages to replenish its working capital
by securing a US$25 million credit line, which was opened by the current
creditors for 6 months. The funds will be directed to financing the harvest as
well as the fall sowing.
The company purchased disc harrows,
seeders, harvesters, trailers, and light vehicles for a total sum of US$2.5
million.
In May 2015, the company renewed cooperation with OTP
Leasing and returned the confiscated equipment worth US$2.8 million.

Business activities

Key assets and activities of “Mriya” are connected to agricultural
production. The company has a vertically integrated structure, which allows it
to effectively manage the entire supply chain.

Land resource management

Land resource management is focused on unlocking the full potential in
Ukrainian agribusiness and using all advantages of black soil in WesternUkraine.

Planning and cultivation

  • Crop planning and cultivation – The planning process takes into account soil characteristics, crop rotation and diversification, use of different types of fertilizers, the need in crops protection, market demand and raw materials costs.
  • Production processes – “Mriya’s” own seed plant fills its demand in high quality seed material; the company uses high quality fertilizers and crop protection products and implements modern technologies for land cultivation including Mini-Till and No-Till.

    Infrastructure and logistics

  • Elevators and granaries – The company owns and uses seven modern elevators as well as granaries, potato and seed storage facilities with a total capacity of 380,000 tons for drying, treatment, and storage of harvest.
  • Potato storage facilities – The Agro Holding uses modern potato storage facilities with a total capacity of around 52,000 tons for long-term storage of potatoes and starch. The facilities are equipped with sorting lines as well as temperature and humidity control systems.
  • Seed plant – Allows the company to produce high quality seeds. The seed production facility is located in Khorostkiv, Ternopil region.

    Social Responsibility

Mriya Agro Holding was a socially responsible company. It implemented a
number of public projects in areas of operation, upon consent and decision of
local communities.
In 2015, “Mriya’s” budget for social investment amounted to UAH 22 million.
To administer this social investment program, Mriya Agro Holding has created
a charity fund, which implements all social projects in medicine, education,
culture, public services, sports, rural infrastructure, assistance to religious
communities, and support of the ATO.

Name

Name of the company, “Mriya” translates to English as “Dream”

Management