Ukraine's Metinvest offers to buy back some of its Eurobonds

MOSCOW. May 2 (Interfax) - The Metinvest mining and metallurgical group has announced a tender to buy back some of its Eurobonds due in 2025 and 2026 for up to $70 million.

Ukrainian media reported, quoting a stock exchange filing by the Metinvest B.V. holding company, that notes maturing in 2025 would be repurchased at 85%-92% of par value, depending on the Dutch auction results.

The par value of the 2026 notes is undefined and will depend on the auction results.

The notes are being bought for cash.

The offer is valid from April 29, 2024, and expires at 16:00 London time on May 8 of this year.

Notes maturing on June 17, 2025, were issued for 300 million euros with a coupon of 5.625%, and notes maturing on April 23, 2026, were issued for $505 million with a coupon of 8.5%. Bonds worth $234.195 million and $493.871 million, respectively, remain outstanding.

"The rationale [for the buyback] is to utilize the group's liquidity outside of Ukraine to proactively manage the company's debt burden, smooth cash outflows for debt service, improve the group's overall debt sustainability, as well as to lower liquidity pressures for the upcoming maturities of the 2025 notes and the 2026 notes, given the ongoing turbulent operating environment for the group," the tender notice says.

Metinvest said the ongoing conflict in Ukraine, coupled with volatile prices on the group's products present unprecedented challenges to the operations of the company and its subsidiaries.

Furthermore there are certain restrictions on the transfer of funds from Ukrainian subsidiaries in accordance with current decisions of by National Bank of Ukraine, and there can be "no assurance that these restrictions will be lifted," Metinvest said.

The tender offers provide bondholders with the opportunity to reduce their exposure to risks to the group's operations that are beyond management's control.

Metinvest is a vertically integrated mining and steel group with assets in Ukraine, EU countries, Britain and the United States. Metinvest is 71.24% owned by SCM and 23.76% by Smart Holding, which jointly manage the group.