Chilean Hortifrut reports deterioration of US$ 55 million in plantations and alerts possible breach of covenant

“Varietal replacements for plants with better genetics”. That was the reason given by the Chilean Hortifrut for him to explain deterioration of approximately US$ 55 million during the last twelve months in its plantations that the fruit company reported to the Commission for the Financial Market (CMF).

The company pointed out that its business model is based on the quality of its biological assets, for which it recurrently evaluates its crops, in order to later carry out tests and modifications. In this process, deterioration would have occurred.

In this situation, Hortifrut warned of a possible breach of the bond issue contracts it has on the market. The company explained that it has agreed with bondholders to maintain a certain ratio between adjusted net financial debt and adjusted EBITDA, which reported as fulfilled in its financial statements published as of June 30, 2022.

However, the fruit company said that “maintains a discrepancy” with the Representative of the Bondholders (RTB), Regarding whether the deterioration in plantations can be added to the calculation of adjusted EBITDAas is done with depreciation and amortization.

“If the opinion of the RTB prevails, the company would not comply with this covenant financial (commitment), Juan Ignacio Allende, general manager of Hortifrut, wrote to the local financial regulator.

The executive stressed that the discrepancy “is only at the measurement level of the adjusted Ebitda calculation” and that it does not affect the firm’s cash or recurring business, “so it does not affect its ability to meet its financial obligations.”

Likewise, he stated that he is working with the RTB to resolve the differences and that, if necessary, he will request a summons to a meeting with the bondholders to report the situation and request “the consents and/or modifications that are required under the bond contracts.” issue”.

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