Metinvest seeks consents to extend 10¼% notes due 2015, waive defaults for three note series

By Susanna Moon

Chicago, April 8 – Metinvest BV said it began a consent solicitation for $1,153,000,000 of three series of bonds.

The company is seeking to amend its $113,651,000 10¼% guaranteed notes due 2015, its $289,734,000 10½% guaranteed notes due 2017 and $750 million 8¾% guaranteed notes due 2018.

The noteholder meetings have been set for May 1 in London.

The company is soliciting consents for the 2015 notes to extend the maturity to Jan. 31, 2016 and to approve a waiver of events of default or potential events of default, according to a company press release.

The company said it is soliciting consents for the 2017 notes and the 2018 notes to approve the waiver.

The deadline to submit voting instructions for the 2015 notes is 9 a.m. ET on April 29; the deadline for the 2017 notes is 9:30 a.m. ET on April 29; and the deadline for the 2018 notes is 10 a.m. ET on April 29.

The company said that, based on its liquidity position right now, its cash flow projections and the significant liquidity risk for withdrawals of its trade finance facilities, Metinvest only has enough head room to pay for operating costs and to pay interest on its bank facilities and bonds, but not enough to pay principal due for the PXF facilities or to repay the principal due on the 2015 notes on May 20.

In order to allow enough time to agree to a broader rescheduling solution for its PXF facilities and its outstanding eurobonds, Metinvest said it is seeking consents to defer the maturity of its remaining 2015 notes until Jan. 31, 2016 as well as a waiver of “ongoing and potential” events of default under the 2015 notes, the 2017 notes and the 2018 notes.

If the measure fails to pass, the principal amount outstanding under the 2015 notes will become due on May 20. Then the negotiation of a standstill and waiver agreement with the PXF lenders may be suspended and Metinvest may face further consequences under its bank facilities or other outstanding bonds if the creditors of those instruments decide to exercise any rights, the release noted.

On the other hand, if the measure passes, the issuer will be subject to an additional restriction under the terms of the 2015 notes, as amended, not to make, and not to permit any of its subsidiaries to make, any dividend payments or other restricted payments from May 20 to Jan. 31, 2016.

Consent payments, other details

The consent payment for noteholders who deliver their consents by 9 a.m. ET on the expiration date is $5.00 per $1,000 principal amount, consisting of an amount of $2.50 per $1,000 for the extension of maturity of the notes and other amendments and the other half for the waiver.

If the measure passes, the issuer will redeem the remaining 2015 notes at their principal amount in two installments: first, an installment of $100 for each $1,000 initial amount payable on May 20, then the remaining $900 of each $1,000 initial amount on Jan. 31, 2016.

The measure must be approved by a majority of noteholders consisting of at least 75% of the votes cast.

The consent amount for those who submit voting instructions by 9:30 a.m. ET or 10 a.m. ET on the expiration date is $2.50 per $1,000 principal amount.

The issuer and its subsidiaries operate a vertically integrated mining and steel business in Ukraine, and its business has been hurt by the “significant civil disturbances and political instability as well as the ongoing military action in the country,” the release noted.

The tabulation agent is the Bank of New York Mellon (+44 0 1202 689 644, Les Cummings, debtrestructing@bnymellon.com or 315 414-3349, Dacia Brown-Jones, ct_reorg_unit_inquiries@bnymellon.com).

The principal paying agent is Bank of New York Mellon, London Branch (fax: +44 0 1202 689 644, Les Cummings, debtrestructuring@bnymellon.com). The U.S. paying agent is Bank of New York Mellon, New York (Dacia Brown-Jones, 315 414-3349, ct_reorg_unit_inquiries@bnymellon.com).

Metinvest is an integrated mining and steel business based in Donetsk, Ukraine.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.