Metinvest proposes that creditors restructure LPN issues worth $1.125 bln

Metinvest B.V. (the Netherlands), the parent company of the Metinvest international vertically integrated mining and steel group, has proposed that holders of its loan participation notes (LPNs) worth $1.125 billion approve the imposing of a moratorium on any payments on the securities until May 27, 2016.

The group said on the Irish Stock Exchange (ISE) that during the period the group plans to maintain a platform for the restructuring of the eurobonds and pre-export finance facilities (PXF facilities) worth $1.089 billion.

Metinvest intends to apply to the court for permission to convene the scheme meeting at a hearing scheduled for January 13, 2015 in the Companies Court, Royal Courts of Justice in London.

The offer concerns holders of LPNs worth $500 million due 2016, LPNs worth $289.734 million due 2017 and LPNs worth $750 million due 2018.

Metinvest plans to pay bonus of $1.25 per $1,000 principal amount of LPNs held by scheme creditors on the date the scheme becomes effective. If the early termination date has not occurred before April 16, 2016, the company will pay to each scheme creditor a further moratorium fee in an amount equal to $1.25 per $1,000 principal amount of LPNs held by scheme creditors.

Any amount of accrued but unpaid interest to and including the termination date will be capitalized and added to the principal amount of the relevant notes. The aggregate amount of such capitalized interest shall be due and payable on the earlier of the termination date and the date when a restructuring is implemented and becomes effective.

Noteholders holding at least 75% of Metinvest's LPNs are to approve the scheme and the scheme will become effective.

Assuming that the court orders that the scheme meeting be convened by the company, the proposed date on which the scheme meeting will be held is January 27, 2016.

In addition, the company plans to extend the standstill agreement on PXF facilities until May 27, 2016.