Ukraine’s largest poultry producer MHP SE has restarted exports and is ready to begin a large-scale sowing campaign, a potential sign of optimism for the region’s commodities trade as Russia’s invasion continues to disrupt flows.

The war is constraining crucial supplies of agricultural commodities that Ukraine sends to world markets, from grains to poultry, as the nation’s ports shuttered and vessels have avoided the region. 

Before Russia’s invasion of Ukraine, MHP—which also grows corn, sunflower, wheat and rapeseed—generated about 60% of its $1.9-billion annual revenue from exports. That share dropped to almost zero as the conflict cut the company off from its usual seaborne shipment routes, forcing it to seek alternatives.

“We are considering exporting by railways, but it is difficult because of the differences in infrastructure between the Ukrainian railways and the European railways,” MHP Chief Financial Officer Viktoria Kapelyushnaya told Bloomberg News in an interview. “We have started poultry exports using trucks and in the nearest time expect to increase export volumes.” 

Cash Woes

The conflict has also blocked MHP from accessing credit lines. It’s been in talks to extend $126 million in short-term financing facilities that have been maturing. 

“The majority has already been agreed to be extended,” Kapelyushnaya said. “It’s very important to preserve the sustainability of the business.”

As part of its efforts to preserve cash, the company said last week it couldn’t make coupon payments on $1.4 billion of bonds. The money on the balance sheet is urgently needed to finance a sowing campaign on 360,000 hectares of land.

To fund the sowing campaign, which may target as much as 95% of its land starting in April, according to Kapelyushnaya, MHP needs about $160 million from March through June, it said earlier this week. As of March 21, the company had $228 million in cash.

“The sowing campaign is concentrated in the center and west of Ukraine, areas which are relatively safer than the rest of the country,” Kapelyushnaya said. “With the products of the sowing campaign, we are expecting positive cash flow from September onwards.”

That may offer some relief to bondholders who were asked by the company for a 270-day extension to a grace period following a missed coupon payment on one of its outstanding dollar bonds. All three of MHP’s dollar bonds traded at about 40 cents to the U.S. dollar on Thursday.

The company will hold a call with investors on March 25 to discuss its consent solicitation offer—a request to change the terms of its bond—which would require holders of more than 50% of them to approve it. MHP is working with JPMorgan Chase & Co. as a solicitation agent and Freshfields Bruckhaus Deringer LLP as legal adviser.