Bondholders meeting of METINV 2015 gets no quorum

A June 1 meeting of the holders meeting of 2015 METINV bonds failed to gain quorum of 75%, Ukraine’s largest steelmaker and iron ore miner Metinvest announced on June 2. The meeting was adjourned, with Metinvest indicating the next gathering may occur in 14-42 days and will require quorum of 25%.

The key issues brought before the bondholders were a maturity extension for 75% of its USD 114 notes to Jan. 31, 2016, with 25% payable in June 2015, as the company is facing liquidity gaps caused by the war in Donbas being waged and being already in default on its PXF facilities.

The holders of Metinvest’s 2017 and 2018 bonds gave their consent for waiving the cross-default clauses at parallel meetings held on June 1. However, validation of these approvals are conditional on consent from the holders of the 2015 notes and therefore have not become effective yet.

Roman Topolyuk: With the bondholders not approving this restructuring proposal, the company is effectively in default on its 2015 Eurobonds, with USD 113.7 mln outstanding on top of a default on PXF financing, which comprised USD 178 mln as of early May.

The results of 2015 METINV bondholders meeting demonstrated that not much has changed in the position of a certain group of holders, who oppose restructuring, even after the company had increased the upfront cash payment to 25% from 10%. There is a chance that a lower required quorum in the second round would enable the meeting to begin, with the outcome of voting uncertain.

We reiterate our negative view on the name as Metinvest’s debt pile in default is just mounting, and management seems to be not very close to reaching a standstill agreement with public creditors and banking lenders.

The holders of 2017 and 2018 notes have given their consent for waiving the cross-default option twice already, which indicates that it might not be in their interests to accelerate their claims. We doubt that banking lenders are interested in launching anything close to a bankruptcy procedure until the company is actively involved in the negotiations, being ready for certain concessions. On the bright side, it’s not in the interests of 2015 METINV bondholders to initiate a full-scale restructuring either, as it will deteriorate the priority of their claims compared to other creditors. The holders of METINV 2015 bonds own just 3% of the company’s total debt.

Источник: Конкорд Капитал