STLC will replace the debt – Kommersant

STLC sent documentation on replacement bonds for consideration to the Bank of Russia. The company expects to replace Eurobonds within about 6-8 weeks after registration of issues in October. However, the issue of missed payments and penalties has not yet been resolved by the issuer, which means that litigation will continue.

STLC plans to issue replacement bonds for Eurobonds within about 6-8 weeks after the registration of issues in October, Mikhail Kadochnikov, the company’s first deputy general director, told Kommersant. He noted that currently STLC has attracted financial and legal consultants and has developed issuance documentation for all six issues in circulation. Now it is undergoing preliminary consideration in the Central Bank.

The issuers of Eurobonds were foreign companies GTLK – GTLK Europe and GTLK Europe Capital DAC, six issues with a nominal volume of $ 3.25 billion are in circulation. In June, the High Court of Ireland began liquidation proceedings against these companies. In early August, the UK government issued licenses that allow STLC to conduct financial transactions related to the bankruptcy of subsidiaries. On August 10, the Board of Directors of STLC approved payments of up to 160 billion rubles. on Eurobonds of subsidiaries for holders, taking into account rights in Russian depositories. STLC has become the last Russian issuer to start paying out its Eurobonds.

Mr. Kadochnikov noted that STLC is expecting a response from the Bank of Russia on the 10th of September, after which the documentation will be submitted for approval by the company’s management bodies. “After that, we will start registering issues, we plan to start this work in October. From the point of view of the specifics, the exchange will be carried out according to the “paper for paper” principle, that is, the condition for participation in the replacement will be an up-to-date extract from the Russian depository,” the top manager said. The replacement bonds will be serviced in rubles at the rate of the Central Bank on the coupon date, payment will be made on the coupon day. STLC plans to replace two issues at a time.

On August 28, STLC began paying coupons – the May coupon for the issue of GTLK-24, Mikhail Kadochnikov added. The August 18 coupon for GTLK-2026 will be paid on Thursday, August 31. “For coupons dated August 26–27 (for issues GTLK-2028 and GTLK-2029), we requested lists from NSD, after receiving them, we will make a payment within 10 days from the date of the coupon. In addition to the above, by the end of the year we have to pay three more coupons for GTLK-2027, GTLK-2025 and GTLK-2024 issues (September 10, October 17 and November 30),” he shared.

Litigation related to Eurobonds, according to him, is still ongoing, but the top manager expects that “the actions taken by the company will positively affect the resolution of disputes and proceedings.”

Experts interviewed by Kommersant positively assess the actions of STLC. STLC non-payments reduced confidence in the system as a whole, says Dmitry Alexandrov, managing director of Ivolga Capital. The Bondholders Association (ABO) noted that “the issuer demonstrates by deed that it recognizes the debt.” STLC was, in fact, the only issuer that did not say anything about its plans for replacement bonds and the possible timing of such a decision, said Alexander Tsyganov, director of the investment and corporate business department at Tsifra Broker.

In general, in relation to replacement bonds, the Presidential Decree sets the deadlines for their issuance – the end of 2023, these requirements are relevant for all issuers with which Eurobonds have been placed, reminded Oleg Bychkov, managing partner of the Pro’SPECT Law Office. According to him, if any issuer issues replacement papers, it has the right not to include missed coupons on Eurobonds in the terms of replacement papers. However, the topic of missed coupon payments may affect the efficiency of the placement of securities, says Anna Avakimyan, chief analyst at Regblok. Missed coupon payments indeed, albeit indirectly, affect the company’s balance sheet, increasing its accounts payable, which cannot but be reflected in credit analyst reviews and investment presentations, explained Andrey Barkhota, an independent financial analyst. According to AVO, lawsuits involving STLC will continue, since the issue of missed payments and penalties has not yet been resolved by the issuer.

Ksenia Kulikova, Ekaterina Volkova