Ozon turns to gov't for loan to refinance convertible bonds - sources
MOSCOW. March 17 (Interfax) - Ozon , which faced the risk of early redemption of its convertible bonds due to the prolonged pause in exchange trading, has turned to the Russian government for a loan to refinance this borrowing, two sources familiar with the situation told Interfax.
In late February, the U.S. NASDAQ exchange suspended trading in shares of a number of Russian issuers, including Ozon, and on March 3, TISE (The International Stock Exchange) temporarily suspended trading in $750 million the the company's convertible bonds. Under the terms of this issue, placed in early 2021, if trading in Ozon shares on the exchange is suspended for 7 working days or more, bondholders have the right to demand early repayment of the principal debt and accumulated interest on it. When this happened, Ozon said it began developing an offer for bondholders and engaged financial and legal advisors. At the same time, the company warned that the Cyprus-based Ozon Holdings should settle accounts with the bond holders, and there was a risk that making money transfers from Russia abroad would be problematic for both technical and regulatory reasons.
According to one of Interfax's sources, Ozon's request for a bond refinancing loan is currently being considered by the relevant ministries.
Amid tough sanctions and the resulting economic problems, the government has decided to return to the mechanism of soft loans for backbone entities, but these cannot be used to refinance debt - only to maintain operations. Ozon also wants to use this tool, says an Interfax source.
The company confirmed its interest in the preferential lending mechanism, but did not comment directly on the request for a loan to refinance the bonds.
"At the moment what is most relevant for us is the possibility of using soft lending, which is included in the list of business support measures. If we get such a line of credit, we will use it to support our operations, such as additional purchases of merchandise and transportation. Maintaining inventory, ensuring sufficient stocks in warehouses, developing logistics and timely delivery across the country are our priority tasks," Ozon told Interfax, noting that "the issues of financial support measures considered by the government for business have been discussed [with authorities] in the regular course of business.
Earlier, the company reported that as of February 28 the amount in its current accounts and deposits amounted to 113 billion rubles.
Ozon noted that the company had asked state authorities for explanations about the application of Presidential Decree No. 81 from March 1 [part of the package of documents which created the currency control system which has been in effect in Russia for the past few weeks].
"We applied to the state authorities for explanations concerning the application of Decree No. 81. The new procedure for settlements with foreign entities may affect the technical side of payments to holders of our bonds, so we can't do without explanations in this case," a spokesperson for the company said. Ozon is "in a working dialogue" with bond holders, he said.
As reported, two other issuers of convertible bonds from the "new economy" sector - Yandex and VK , faced similar problems due to the lack of trading. Interfax has sent inquiries to these companies as to whether they had turned to authorities for help in refinancing their debts.