MHP Bond Refinancing

Project Description

A loan of up to USD 100 million for the refinancing of MHP’s (“MHP” or “the Group”) Eurobonds maturing in 2024.

Project Objectives

The main objective of the Project is to enable the Group to sustain its financial resilience by refinancing its Eurobonds at a time of limited access to capital markets financing due to the ongoing war on Ukraine. 

Transition Impact

ETI score: 70

Primary Quality Resilient:

The Project will significantly enhance the Group’s financial resilience, ensuring its production volumes continue to address food security risk in Ukraine and globally. 

Secondary Quality Inclusive:

The Project will help to preserve MHP’s human capital and the livelihoods of its employees in Ukraine.

Client Information

CONFIDENTIAL

MHP Group is one of the leading grain, poultry and edible oils producers in Ukraine and Southeastern Europe.

EBRD Finance Summary

USD 100,000,000.00

Up to USD 100 million loan to MHP SE, a holding company of the Group, and its subsidiaries in Ukraine.

Total Project Cost

USD 400,000,000.00

The Loan is part of a larger financing package from financial institutions.

Additionality

Terms: As a result of the war on Ukraine, the market for liquidity financing in Ukraine is nearly closed and Ukrainian companies do not have access to capital markets. The Loan, in parallel with expected financing from other financial institutions, bridges the gap required to obtain the full amount for bonds refinancing.

EBRD attributes: As part of the Project the Bank will support the development of MHP’s comprehensive strategy on climate change as well as a clear pathway and action plan for its implementation. 

Standard-setting (Gender SMART): The Project is Gender Additional in line with the Group’s commitments to train more women workers into previously male-dominated positions, addressing business-critical gaps within its operations.

Environmental and Social Summary

Categorised B (ESP 2019). MHP is a long-standing client of the Bank and the Bank understands well the potential environmental and social impacts associated with the Group’s broader activities. 

MHP has been subject to a number of due diligence processes and external monitoring assignments, including the most recent independent monitoring review of the activities of the Group conducted in summer 2023 (“2023 Monitoring Review”). The 2023 Monitoring Review was undertaken by a third party consultant and included a high-level assessment of how the Group continues to manage E&S issues evidenced by site visits to one of the agricultural production facilities, a poultry processing facility and a biogas facility. The assignment included a number of tailored tasks, including a review of the current operational performance of the selected Group subsidiaries’ existing operations, considering environmental, health, safety, public and road safety and social performance. Each of the elements was assessed in accordance with the requirements of national legislation, EBRD’s 2019 Environmental and Social Policy, and taking into consideration the needs for recovery, adaptation, and development for the war and post-war periods based on the principles of sustainable development.

The consultants reported that MHP has progressed well in installing an effective EHS management system. The Group continues to improve its organizational approach to E&S issues, always aiming to increase coordination, effectiveness, and employee engagement across all facilities. The Group has established a Sustainability and International Affairs Committee to aid MHP’s Board of Directors in carrying out its governance responsibilities regarding sustainability and international affairs performance.  The E&S management system is cascaded throughout the organisation with different certified management systems being applied at different facilities depending on the need.  Further development of these systems is in progress as the Group plans to implement a holistic health and safety management system through application of  the ISO 45001 (health and safety) and ISO 39001 (road safety) systems in chosen facilities by 2024.

MHP has developed and approved a comprehensive HR Policy that is routinely reviewed by MHP’s Board, communicated to all employees, and posted on the corporate website. The HR Policy provides a structure for the management of HR issues and addresses all aspects of MHP’s employee relations, such as recruitment, training and development, mentoring, employee retention, communications, remuneration levels (including adherence to minimum wage legislation), representation, confidentiality, behaviour, assessment, working hours, grievance processes, diversity, forced and child labour.  The Policy is implemented through a range of specially developed procedures and internal regulations, and regularly monitored by relevant departments.

The Group has well developed stakeholder engagement and information disclosure practices with a number of documents developed and approved by the Group for working with communities and other stakeholders’ groups, including: Stakeholder Engagement Plan (updated 2020); a Community Relations Procedure; a procedure of engagement with nongovernmental organizations (2020); land use policy (2020); a Corporate philanthropy & charity policy (2020) and a Code of Ethical Conduct.

The consultant confirmed that, during the site visits, no critical issues were noted. Some areas for further improvement were proposed including additional development of the supply chain management systems, confirmation of compliance with EU requirements for chemicals, positioning of material safety data sheets and further development of waste storage management. The proposed areas of improvement were included into the Environmental and Social Action Plan (ESAP), which was agreed with the Group. The ESAP also includes development and implementation of a corporate climate action plan, as well as GHG emission disclosure, reporting and targets.

The past two projects with MHP (MHP Biogas and MHP Corporate Support) have been the subject of a previous problem solving initiative under the former Project Complaint Mechanism (PCM), and are currently under a compliance review by the current Independent Project Accountability Mechanism (IPAM). 

Technical Cooperation and Grant Financing

TC: Legal due diligence costs will be partially covered by the Japan-EBRD Technical Cooperation Fund.

A technical assistance in developing a corporate climate governance (CCG) strategy will be funded by the Clean Technology Fund under the High Impact for the Corporate Sector programme. 

E&S monitoring costs are partially covered from the Special Shareholders Fund.

Road Safety assignment to develop and implement a Road Safety Management system will be partially covered by the Japan-EBRD Technical Cooperation Fund.

Non-TC: The EBRD loan is approved on the basis of partial coverage by guarantees from donors. 

Company Contact Information

Anastasiya Sobotyuk
a.sobotyuk@mhp.com.ua
+38 050 339 2999
+38 050 339 2999
PrJSC “MHP”, 158, Ak.Zabolotnogo Str Kyiv, Ukraine, 03143

PSD last updated

26 Sep 2023

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

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General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and Compliance

The EBRD’s Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank’s countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD Enquiries form.

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM  via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.