KIEV (Reuters) - Ukrainian agricultural producer Agroton (A2TAq.F) has asked holders of its $50 million bond to accept a postponement of coupons after missing a payment because most of its cash was frozen in a Bank of Cyprus BOC.CY account.
Agroton, a diversified agricultural group focused on grain growing, livestock farming and food processing, said it was asking bondholders for permission to pay a $3 million coupon due on July 14 six months later and to extend the maturity of the issue by five years from January 2014.
Under an international bailout agreed in March, heavily indebted Cyprus froze deposits of more than 100,000 euros ($131,400) at Bank of Cyprus, its largest lender, and indicated depositors would lose some of their money.
Agroton also on Wednesday asked bondholders to accept a cut the interest rate on the bond to 8.0 percent from 12.5 percent and to allow the company to increase its overall debt. It said investors would vote on its proposal on August 8.
The Warsaw-listed company said earlier this week that out of about $4.5 million it had held in the bank at the end of March, $1.6 million had been converted into equity, $1.0 million had been written off and $1.9 million remained frozen.
Before its financial meltdown, Cyprus was an attractive banking destination for companies from the ex-Soviet Union due to its low tax regime. Cyprus has treaties with more than four dozen countries including Ukraine to avoid double taxation. ($1 = 0.7612 euros)
Reporting by Olzhas Auyezov; Editing by David Holmes