The largest mining and metal holding of Ukraine Metinvest initiates amendments to the conditions of its outstanding 2015, 2017 and 2018 notes totally worth $1.153 billion due to the events in Ukraine.
The holding proposed that the consent solicitations foresee the approval of a waiver of certain events of default or potential events of default and the extension of 2015 notes maturity to January 31, 2016 from May 20, 2015, the holding said on the Irish Stock Exchange (ISE).
Metinvest said that the deadline for submission of voting instructions by noteholders is May 29, 2015. The meeting will be held on June 1 in London. The extraordinary resolution must be passed at a meeting of noteholders duly convened and held by a majority consisting of not less than 75% of the votes cast.
The company said that the consent amount is $5 per $1,000 principal amount of the 2015 notes payable to all noteholders that validly deliver (and do not withdraw) voting instructions or forms of sub-proxy instructions (as applicable) in favor of the amendments by no later than 2 p.m. (London time) on the expiration date.
If the extraordinary resolution is passed and the amendments and the waiver are effected, the issuer will redeem the remaining 2015 notes at their principal amount in two installments: (i) an installment of $28,412,750 payable on June 20, 2015; and (ii) an installment of $85,238,250 payable on January 31, 2016 (the repayment date).
The company said that the consent amount was $2.50 per $1,000 principal amount of the 2017 and 2018 notes payable to all noteholders that validly deliver (and do not withdraw) voting instructions or forms of sub-proxy instructions (as applicable) in favor of the amendments by no later than 2 p.m. (London time) on the expiration date.
A significant part of Metinvest’s assets are located in Ukraine and have been affected by the ongoing civil disturbances and political instability as well as the ongoing military action in the country. These events have damaged and destroyed transport infrastructure, disrupting deliveries of raw materials and shipments of finished goods from some of Metinvest’s plants; caused production volumes of steel, iron ore, coke and coal products to decline; and affected economic activity and, as a result, domestic demand for steel and iron ore products, reads the report.
In addition, prices of steel products continued to decrease in 2014 and the first quarter of 2015, while those of coal and iron ore are experiencing both volatility and overall declines. Metinvest repaid $1.525 billion of its loans and borrowings in 2014 but, as a consequence of the conflict in Ukraine, has been unable to access the international capital and loan markets to refinance its existing debt. Metinvest does not expect any material improvement in its overall liquidity before 2017.