Metinvest will appeal to London court in case of refusal of Eurobond holders to restructure shares

Metinvest, a mining and metallurgical company, has notified its Eurobond holders that if the next meeting of Eurobond holders with maturity in 2015, scheduled for June 26, does not take place, the company will have to go to the Royal Court to defend its rights. As previously reported, in connection with the events in Ukraine, Metinvest has repeatedly tried to initiate amendments to the terms of redemption of Eurobonds with maturity in 2015, 2017 and 2018 for a total nominal amount of $ 1.153 billion.

A significant portion of Metinvest's assets located in Ukraine have been affected by the ongoing hostilities and political instability in the country. All this caused damage and destruction of the transport infrastructure, which disrupted the supply of raw materials to some of Metinvest's facilities, and also made it difficult to ship finished products. Economic activity and domestic demand for steel and iron ore fell in the country.

In addition, prices for metal products decreased, which affects the prices of iron ore and coal, as a result of the overall decline. Metinvest repaid $ 1.525 billion of its loans and borrowings in 2014, however, due to the situation in Ukraine, it was unable to refinance its existing debt without having access to international capital and credit markets. Metinvest does not foresee any significant improvement in its liquidity until 2017.

According to a report from the company on the Irish Stock Exchange, a court hearing is scheduled for July 3, which could lead to a temporary moratorium on coercive creditors. This should create a stable platform for negotiations on financial debt restructuring with Eurobond holders and other stakeholders, as stated in the report.

Metinvest said that if its proposals are agreed upon, the holders of Eurobonds maturing in 2015 will receive $ 5 per $ 1,000 of the par value of the securities, and the principal amount will be repaid in two stages: June 20, 2015 - 25 percent (US $ 28.413 million). dollars) and January 31, 2016 - 75 percent ($ 85.238 million), while the original proposal on April 8 - 10 percent and 90 percent, respectively.