Seventh Continent Announces Results of Restructuring of Obligations
OREANDA-NEWS. November 11, 2009. JSC "The Seventh Continent" (hereinafter - the Company) announced successful completion of restructuring of its buy-back obligations in relation to its Bonds, series 02 (hereinafter - Bonds, series 02), placed on 21 June 2007 for the total amount of RUR 7 billion, reported the press-centre of Seventh Continent.
Currently, taking into account completed bond restructuring, additional public offer of 15 October 2009 and also several out-of-court settlement agreements signed with some holders of Bonds, series 02, the Company has achieved agreements on settlement of its obligations on 99.86% of the total amount of Bonds, series 02.
For the purpose of meeting its obligations to the holders of Bonds, series 02, on 23 June 2009 the Company has made a proposal to carry out bond restructuring. In the framework of the proposed restructuring, bondholders were offered to exchange their bonds for cash in the amount of 20% of par value of Bonds, series 02 and for new commercial paper ("CP") for the remaining 80%.
CP issue terms comprise:
u 2-year maturity
u Coupon of 15.5% p.a., paid quarterly
u Principal amortization in 5 equal installments starting June 2010
Calculated effective yield in the frame of restructuring for the bond holders was established at 17% p.a.
Due to certain legal restrictions, pension fund managers could not accept restructuring terms offered by the Company. On 25 September 2009, specifically for this type of bondholders the Company has announced two additional irrevocable public offers, proposing to buy back 20% of their holding on 15 October 2009 and remaining 80% - on 18 May 2010. Calculated effective yield under this offer is established at 16% p.a.
On 15 October 2009 the Company has fulfilled its obligations under the public offer dated 25 October 2009 having bought back 20% of the bonds. The terms of the public offer dated 25 September 2009 include the provisions stating that those holders accepting the said public offer, hereby confirm that the Company does not have any unfulfilled obligations to them under the public offer dated 14 June 2007. Bonds of series 02 remaining in circulation will be bought back by the Company on 18 May 2010, as stipulated in its public offer dated 25 September 2009.
MDM Bank has acted as restructuring agent.
Boris Morozov, the Chief Executive Officer of the Company:
"We are glad to announce completion of bond restructuring, where virtually full amount of the Bond, series 02 was restructured. The financial crisis has seriously affected capital markets and has negatively reflected on the Company's ability to attract funds for refinancing of its maturing obligations. Unfortunately, in such conditions, full repayment of RUR 7bn bond in June 2009 only from operating cash flow was not possible. We have been carrying out active talks on restructuring with our bondholders in recent months. The idea of our restructuring proposal was to set a new redemption schedule, feasible for the Company and acceptable for bondholders.
I would like to cordially thank all our colleagues, partners and creditors, who have given us their support in difficult times and helped us achieve successful completion of this project."
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