Court sanctions extension of Metinvest standstill with bondholders
1 February 2016
Ukraine’s largest steelmaker and iron ore miner Metinvest (METINV) announced on Jan. 29 that the High Court of England and Wales sanctioned its scheme of arrangement. The scheme included the extension of a standstill with bondholders and the capitalization of 70% of accrued interest on bonds by May 27, 2016, when the company expects to reach a comprehensive debt restructuring deal with all creditors.
On Jan. 27, 92% of bondholders voted in favor of the company’s scheme proposal. According to the timetable of the scheme’s implementation, Metinvest has to pay the bondholders, who approved the scheme of arrangement, USD 1.25 per USD 1000 of notional principal by Feb. 8.
Roman Topolyuk: With the court’s sanction in place, Metinvest has almost finalized the process of shifting the standstill date with bondholders, and thus avoided a possible default on its USD 85 mln notes scheduled to mature on Jan.31, 2016. Metinvest also obtained relief on its immediate interest payments.
The company has to reach a similar arrangement with its banking lenders, as the standstill with them expired at the end of January, and Metinvest is in default on its payments of USD 637 mln, and may default on an additional USD 140 mln by May 27. With both standstills approved (which is a base-case scenario for us), Metinvest may continue its talks on the new maturity schedule.
