Metinvest appoints postponed bondholders meeting for June 26

Ukraine’s largest steelmaker and iron ore miner Metinvest (METINV) will hold a meeting of the holders of its 2015 bonds on June 26, the company announced on June 9. It will be a second-round meeting after its June 1 meeting failed to gain quorum of 75%. The bond’s curretnly outstanding USD 113.4 mln were due for redemption on May 20, 2015.

This time, the quorum is set lower at 25% and the same conditions are being offered to bondholders for consideration, as they had been in the previous meeting. In particular, the offer consists of a 25% outright payment and the remainder’s repayment on Jan. 30, 2016, as well as no coupon increase (10.25%). Another clause foresees proportional redemption of bonds in excess of the outright payment, if banking lenders get more than USD 28.4 mln by January 2016.

Roman Topolyuk: Though the outcome of the June 26 voting is still uncertain, the chances that the proposal will be passed are much higher now with quorum being reduced. The outcome, however, will depend on whether the opposing bondholders decide to undermine the results of the voting, which we should not be ruled out.

If the restructuring is approved, one of the stalemates around Metinvest’s debt will be resolved and the focus could move to negotiations with providers of PXF financing, whose decision on maturity extension will be crucial for upgrading the company’s debt. A negative outcome to the bondholders meeting could lead to a possible large-scale restructuring procedure.