1 Apr 2022 17:36

Severstal requests licenses from regulators of UK, Ireland, Luxembourg to pay LPN

MOSCOW. April 1 (Interfax) - Severstal has requested licenses from the United Kingdom Office of Financial Sanctions Implementation (OFSI) and the sanctions authorities of Luxembourg and Ireland to allow it to make payments related to its Loan Participation Notes (LPN) program, the metals company said in a statement.

"These applications request that the OFSI and other relevant competent authorities in the European Union grant specific licenses authorizing, to the extent such authorization is required under applicable sanctions, the financial institutions and other parties involved in the LPN program to resume normal processing of payments that are or become due under the LPN program," Severstal said.

"This would include the transfer of the interest due to the issuer to the latter's bank account with the paying agent (Citibank, N.A., London Branch) and the normal onward payment of those funds on behalf of the Issuer toward the holders of the LPN," it said

"Mindful of the urgency of the matter, we have requested that the relevant competent authorities consider our application on an expedited basis," Severstal said.

Severstal, whose majority owner, Alexei Mordashov, has been under EU sanctions since late February, said last week that it could not make payments on its 2024 LPNs, as the funds had been frozen.

Severstal said a test payment attempted on its 2024 LPNs on March 16 had not reached the issuer's account, with the funds frozen by the payment agent. The company tried to pay a 1% coupon or $12.6 million in total. If approved, investors would have been able to receive the remaining amount, Severstal said. But Citibank blocked the payment.

Severstal said earlier in the week that it had requested a license from the United States Department of the Treasury's Office of Foreign Assets Control to allow it to honor its debt obligations.