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Metinvest Completes Debt Restructuring

22 March 2017

22 March 2017 – Metinvest B.V., the parent company of a vertically integrated group of steel and mining companies (jointly referred to as “Metinvest” or “the Group”), today announces the completion of the process to restructure US$2.3 billion in financial debt.

Based on the agreement reached, three series of guaranteed notes – due in 2016, 2017 and 2018 – have been cancelled and delisted and replaced with new listed senior secured notes totalling approximately US$1.2 billion, due in December 2021 and with new terms and conditions. In addition, four PXF syndicated loan agreements have been amended and restated the terms of which now provide for, among other things, the combining of the four existing PXF facilities into one facility of approximately US$1.1 billion due in June 2021.

The terms of Metinvest’s new debt instruments provide for the debt maturities to be extended by five years, including, in respect of the new PXF facility,  two years of grace period on the scheduled amortisation of principal. The restructuring provides cash flow flexibility to the Group by imposing a requirement to pay only 30% of accrued interest in cash until the end of 2018. The agreements reached set forth a repayment schedule that allows Metinvest to pursue its production and investment objectives in the next five years, while increasing business profitability.

For more information about the restructuring, please visit the link.

Neither Metinvest B.V. nor any of its subsidiaries applied for bankruptcy proceedings as part of the restructuring process. The Group continues to carry on its business and operations and intends to meet its obligations as usual.

Commenting on the event, Yuriy Ryzhenkov, Chief Executive Officer of Metinvest, said: "The Group had to embark on a debt restructuring due to multi-year low global prices of steel and iron ore products, reduced production volumes amid the conflict in Eastern Ukraine, and its inability to refinance. This deal is unprecedented for the industry and corporate sector of Ukraine. The restructuring negotiations started in early 2015, and we have been in constructive dialogue with all stakeholders throughout this time. The Group has always respected its obligations to creditors, having never demanded a write-off of any part of debt. With creditors’ support, we have arrived at a common solution, cured defaults, deferred repayments for five years and issued new instruments. As such, we have increased our creditors’ confidence and maintained the Group's access to international capital markets. We would also like to thank our legal advisors, Allen & Overy and Baker & McKenzie, our financial advisor, Rothschild, and our information agent, Lucid."