15 Jul 2009 17:24

EM Alliance debut bond issue enters technical default

MOSCOW. July 15 (Interfax) - EM Alliance's debut issue of bonds entered into technical default after the company was unable to agree a debt restructuring with all holders of the bonds.

Bond holders with just over one-fourth of the issue had tried to redeem the bonds, which were issued by EM Alliance-Finance, a special purpose vehicle.

EM Alliance needed to pay 522.374 million rubles, including the accumulated coupon liability (1.027 million rubles), in order to redeem the bonds offered.

EM Alliance was to have announced a mandatory offer for the bonds on Tuesday.

On that day, EM Alliance said that it had met its commitments "in the form of a debt restructuring and direct payments" with three-fourths of bond holders. The agent is MDM Bank . "Negotiations with the other bond holders were not fully completed for various reasons before the date of the offer," EM Alliance said, adding that it planned to complete the negotiations in the near future.

EM Alliance produces and repairs equipment for boiler island power stations. It owns 69.63% of ordinary shares (57.38% of equity) in Krasny Kotelschik (Red Boiler) plant and has branches in Taganrog, Podolsk, Barnaul and Ivanovo. Auburn Investments Ltd is the sole owner of EM Alliance. Yevgeny Tugolukov is the main beneficiary of Auburn Investments.