Adecoagro announces proposed offering of senior unsecured notes

LUXEMBOURG - Agricultural production company Adecoagro S.A. (NYSE:AGRO), with a market capitalization of $954 million and annual revenue of $1.58 billion, announced Friday its intention to offer senior unsecured notes in a private placement to qualified institutional buyers.

The offering will be conducted in accordance with Rule 144A under the Securities Act of 1933 for U.S. investors and Regulation S for non-U.S. persons, according to a company press release.

The notes will be guaranteed on a senior unsecured basis by certain Adecoagro subsidiaries. Pricing and terms remain subject to market conditions. According to InvestingPro data, the company maintains a healthy current ratio of 1.98, with liquid assets exceeding short-term obligations, suggesting strong debt service capacity.

Proceeds from the offering will primarily fund a tender offer to purchase any and all of the company’s existing 6.000% Notes due 2027. Any remaining funds will be directed toward general corporate purposes, including capital expenditures and liability management.

The securities have not been registered under the Securities Act or applicable state securities laws and will only be offered to qualified institutional buyers and non-U.S. persons.

Adecoagro describes itself as a sustainable production company operating in South America. The company owns 210,400 hectares of farmland and industrial facilities across Argentina, Brazil and Uruguay, where it produces over 2.8 million tons of agricultural products and more than 1 million MWh of renewable electricity. With an EBITDA of $360 million and a debt-to-equity ratio of 0.9, InvestingPro analysis indicates the company is currently undervalued, maintaining a "GOOD" overall financial health score. Discover detailed valuation metrics and 7 additional key insights about AGRO through InvestingPro’s comprehensive research reports.

The company did not specify the size of the offering or expected pricing in its announcement.

In other recent news, Adecoagro S.A. has announced a collaboration with Tether Holdings to explore bitcoin mining using renewable energy. This partnership aims to leverage Adecoagro’s renewable energy capacity in South America, which exceeds 230 MW, to support bitcoin mining operations. Additionally, Adecoagro has undergone a significant board reshuffle after Tether Investments acquired a 70% stake in the company, resulting in the resignation of five board members and the appointment of five new directors. This change is part of a broader strategy to enhance the company’s performance in the food and renewable energy sectors.

Moreover, Adecoagro has faced analyst downgrades from both BofA Securities and Morgan Stanley. BofA Securities downgraded the stock from Neutral to Underperform, lowering the price target to $10.80 due to increased financial risks and uncertainties related to the company’s controlling shareholder, Tether Investments. Similarly, Morgan Stanley downgraded Adecoagro from Equalweight to Underweight, setting a new price target of $10. The firm cited concerns about share liquidity and the strategic direction under Tether Investments’ control.

These developments highlight the evolving dynamics within Adecoagro, as the company navigates new partnerships and strategic shifts under its new controlling shareholder. Investors are encouraged to pay close attention to these changes, which could significantly impact the company’s future operations and market position.

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