Rusal gets votes for one 2023 note, adjourns meeting for other series

By Marisa Wong

Los Angeles, Dec. 23 – Russia’s United Co. Rusal plc announced results of its Nov. 30 consent solicitation involving its (i) $500 million 4.85% guaranteed notes due February 2023 (ISIN: XS1759468967) and (ii) $500 million 5.3% guaranteed notes due May 2023 (ISIN: XS1577964965), $460,405,000 of which is outstanding.

Meetings were held on Dec. 22 for holders of the two series to vote on extraordinary resolutions to approve some proposals and grant some waivers.

The extraordinary resolution passed at the meeting for the May 2023 notes, but the meeting for the February 2023 notes was adjourned due to lack of quorum, according to a company announcement on Friday.

The adjourned meeting for the February 2023 notes will be held at 11 a.m. ET on Jan. 10 via teleconference.

The quorum at the adjourned meeting will be one or more persons holding or representing at least one-half in principal amount of the notes outstanding.

Proposal

The company is proposing to introduce an alternative payment mechanism and to waive any actual or potential breaches and any cross-default that might occur due to payments made under the alternative payment mechanism.

To pass, the extraordinary resolution at each meeting requires affirmative votes from holders of at least 75% of the outstanding principal amount of the relevant series.

The quorum required at each original Dec. 22 meeting was one or more persons representing at least 75% of the outstanding principal amount of the relevant series.

The issuer is not offering any consent fee.

Background

As previously announced, there is a coupon and principal payment under the February 2023 notes due on Feb. 1 and a coupon and principal payment under the May 2023 notes due on May 3, 2023.

In light of sanctions against Russia and Russian companies and individuals and restrictions with respect to securities of Russian issuers introduced by European central securities depositories – although neither the issuer nor any of the guarantors is a sanctions restricted person – there exists a risk that the coupon and the principal amount under both series of 2023 notes received from the issuer or the guarantors by the principal paying agent can be blocked, delayed or frozen and that, consequently, those funds will not be distributed among the noteholders, the company explained.

In turn, the Russian authorities have introduced some currency restrictions aimed at restricting the outflow of foreign currency from Russia and imposed a number of restrictions on transacting with non-Russian counterparts.

Earlier this year the company successfully obtained the consent of the noteholders to pay the coupon under the February 2023 notes due Aug. 1 and the coupon under the May 2023 notes due Nov. 3 in accordance with a mechanism similar to the alternative payment mechanism currently proposed.

Given this, in order to ensure the equal treatment of all noteholders to receive the February 2023 and May 2023 notes payments, the punctuality of the payments and the protection of the rights and interests of the noteholders, the company is conducting the current consent solicitation.

Details

Copies of the consent solicitation memorandum can be obtained by registering on the website https://www.i2capmark.com/event-details/63/Holder/rusal-capital-dac.

Holders of record as of Dec. 13 are eligible to participate.

i2 Capital Markets (rusal@i2capmark.com) is the information and tabulation agent.

Rusal is a Moscow-based aluminum company.

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