Novolipetsk Steel seeks consents to amend loan participation notes

By Marisa Wong

Los Angeles, Aug. 15 – Novolipetsk Steel announced that Steel Funding DAC launched on Aug. 12 consent solicitation processes for each of four series of outstanding loan participation notes.

Steel Funding is seeking to amend the documents for its $700 million 4½% loan participation notes due 2023 (ISIN: XS1405775617, US85812PAC77), $433,609,000 of which is outstanding; $500 million 4% loan participation notes due 2024 (ISIN: XS1577953174, US85812RAA77), $295,823,000 of which is outstanding; $500 million 4.7% loan participation notes due 2026 (ISIN: XS1843435337, US85812RAB50), all of which is outstanding; and €500 million 1.45% loan participation notes due 2026 (ISIN: XS2346922755, XS2346922912), all of which is outstanding.

The issuer is proposing to amend the notes to enable NLMK to make direct payments to the noteholders in Russian depositaries, waive payments under the notes held by NLMK or other members of its group and cancel notes held by the group without the need to deliver them to the registrar. Currently, delivery is in many instances impossible if the notes are held with a Russian depositary, the company explained.

Other proposed amendments are more technical and are aimed at ensuring that the issuer is able to operate and service its debt if certain services cease to be available to it or if it or NLMK is unable to make payments in the currency of the notes.

Additionally, in order to have more time to implement the above proposals before the due dates for interest payments under certain notes, by way of separate resolutions, the issuer is seeking from the holders of 2023 notes, 2024 notes and 2026 dollar-denominated notes a consent to waive any breaches of note documentation resulting from the issuer’s failure to pay interest on the relevant notes on or before Dec. 31.

The voting deadline for the 2024 notes and 2026 dollar-denominated notes is 11 a.m. ET on Sept. 1. The voting deadline for the 2023 notes and 2026 euro-denominated notes is 11 a.m. ET on Sept. 7.

Meetings for holders of the 2024 notes and 2026 dollar-denominated notes will be held at 11 a.m. ET and 11:45 a.m. ET, respectively, on Sept. 3. Meetings for holders of the 2023 notes and 2026 euro-denominated notes will be held at 11 a.m. ET and 11:45 a.m. ET, respectively, on Sept. 9.

The quorum required for an extraordinary resolution to be considered at a meeting will be one or more persons holding notes or being proxies or representatives and holding or representing at least two-thirds of the principal amount of the outstanding notes (or one-half should the meeting be adjourned).

Affirmative votes of at least two-thirds of that quorum will be required to approve the proposals contained in the extraordinary resolutions.

No consent fee is payable in connection with the consent solicitations.

Copies of all announcements, notices and press releases, as well as some documents related to consent solicitations are available at https://www.i2capmark.com/event-details/69/Holder/nlmk-steel-funding-dac-consent-solicitation.

Questions should be directed to the information and tabulation agent, i2 Capital Markets (nlmkconsent@i2capmark.com or +44 20 3633 1212).

Questions may also be directed to the corporate finance and investor relations department of NLMK Group (ir@nlmk.com or +7 495 504 0 504 (ext. 227)).

The steel company is based in Lipetsk, Russia.

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