Metinvest pays 30% of January coupon, gets court sanction for restruct

Metinvest (METINV) announced Feb. 8 that a UK Court sanctioned the Scheme of Arrangement to implement the company’s debt restructuring. Also, the company announced that the Scheme Effective Date is Feb. 8.

On the same day, the holding reported it is paying only USD 2.74 mln in January coupons on its Eurobonds, or the minimum committed amount of 30% of accrued. The rest of the accrued amount (USD 6.4 mln) was capitalized and the total principal amount of Eurobonds increased 0.54% to USD 1,189 mln. The holding explains this small payment by the low average cash for January, which was USD 158.6 mln, or below the USD 180 mln threshold that allows it to pay excess coupons.

Andriy Perederey: The decreased cash balance and minimum coupon payment for January is a disappointment, taking into account that Metinvest paid over 150% of accrued interest in the previous two months. This prompts us to hold that in February the company will also pay 30% of accrued interest. We believe the decrease in the cash balance was a result of increased investments (into CapEx or working capital) rather than the worsening ability of the holding to generate operating cash flow. So, the decreased payment does not change our positive view on Metinvest Eurobonds.

The court’s sanctioning of the scheme was the last formal step in approving Metinvest’s debt restructuring. As it was made in accordance to the earlier provided schedule, we expect that the other deadlines will be also met, meaning that Settlement Date will be Feb. 28.