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Concorde Capital Research: Metinvest pays coupons on Eurobonds as agreed by scheme

February 10, 2016 | Cbonds

Ukraine’s largest steelmaker Metinvest (METINV) paid USD 11.2 mln in coupons on all its Eurobonds under the conditions agreed with bondholders on Jan. 27, the holding reported Feb. 9. In particular, it paid 30% of the total coupons accrued as of Jan. 31, and capitalized the rest. The amounts paid included USD 0.5 mln on 2016 notes, USD 1.6 mln on 2017 notes and USD 9.1 mln on 2018 notes. Metinvest capitalized USD 26.2 mln of coupons, thus raising the amount outstanding of all its Eurobonds.

The company concluded that it doesn’t have an excess of cash (which is defined as balance between unrestricted cash balances and USD 180 mln) to distribute between creditors. The most recent cash position which Metinvest reported was USD 140 mln, as of Jan.6, 2016.

According to the scheme arrangement agreed with its bondholders, Metinvest will make four monthly coupon payments on its notes, starting February 15, unless it agrees with bondholders on new restructuring conditions. The deadline to reach a new agreement is May, 27.

Roman Topolyuk: In addition to bondholders, Metinvest was also negotiating with the owners of its PXF loans (worth USD 1.1 bln) on similar restructuring terms. The holding hasn’t disclosed whether it has reached a new standstill (the previous one expired January 2016) with PXF lenders.

The relief on coupon payments is definitely timely for Metinvest, which is struggling to break even in an environment of decade-low steel and iron ore prices. We estimate the holding will pay a total of USD 22 mln, as 30% of its accrued coupons, by May 27, including the first payment announced on Feb. 9, and will capitalize USD 51 mln. If creditors and the company don’t agree on a new deal earlier, Mentivest’s amount of Eurobonds outstanding will reach USD 1176 mln. This would increase the total debt of Metinvest to USD 3001 mln, compared to an estimated USD 2950 mln as of end-2015.

Company: Metinvest

Full company nameMetinvest B.V.
Country of riskUkraine
Country of registrationNetherlands
IndustryFerrous metals

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