Lukoil offered to buy $6.3 billion worth of Eurobonds from holders
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The company clarified that the Eurobonds will be redeemed solely for the purpose of their redemption. The rationale for the proposal states that Russian bondholders cannot receive payments through international clearing systems due to legal restrictions, and in order to make payments to investors from foreign countries, a special license from the Russian government is required and the company has no guarantees regarding its receipt. “Even if Lukoil obtains such a license, the license will most likely allow payments through international clearing systems in the amount due only to foreign bondholders, and not the entire amount as part of servicing the bonds, which may lead to a default,” the company said in a statement.
Also, Lukoil notes that further changes in Russian legislation are possible, which will not allow fulfilling obligations, and there is a risk of non-fulfillment of their obligations by intermediaries. “As of today, Lukoil has sufficient cash to purchase all bonds outstanding without exception during this period of uncertainty, which is in line with the current objectives of Lukoil’s financial policy,” the company clarifies.
The size of the proposed ransom amount per each $1,000 will be discussed individually, Lukoil added.
The company plans to buy back bonds issued by LUKOIL International Finance BV in the amount of $1.5 billion maturing in 2023 and $1 billion maturing in 2026, bonds of LUKOIL Capital DAC in the amount of $1.15 billion maturing in 2027. and $1.15 bn maturing in 2031, LUKOIL Securities BV for $1.5 bn maturing in 2030.
May 5 Lukoil sent notices on termination of listing of depository receipts on foreign exchanges. May 16 Board of Directors of the company recommended meeting of shareholders not to declare or pay dividends on ordinary shares based on the results of 2021 and leave net profit for the last quarter of the year undistributed.
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