Celtic Resources seeks to replace trustee, push payments to maturity for 4.125% notes

By Wendy Van Sickle

Columbus, Ohio, Aug. 28 – Celtic Resources Holdings DAC began a consent solicitation related to its $400 million 4.125% guaranteed notes due 2024 (Cusip: 15119CAA7), according to a company announcement.

The issuer is asking holders to pass an extraordinary resolution approving the appointment of LCP Investor Services to replace i2 Capital Trust Corp. Ltd. as trustee under the trust deed dated Oct. 9, 2019 and to pass some proposed amendments to the trust deed that include termination of guarantees.

Additionally, Celtic Resources is asking holders to postpone payment of interest on the notes to the final maturity date, discharge the issuer and the guarantors from covenants and certain events of defaults, change the arbitration venue to Hong Kong International Arbitration Centre and reduce the quorum for passing the written resolution of noteholders.

Further, the issuer is seeking to increase the number of outstanding notes required for the holders to request the trustee to give notice to the issuer that the notes are immediately due and repayable, effect changes to the trust deed to ensure the notes held by the group are deemed to be outstanding for voting purposes, allow the redemption of the notes in specie or in-kind, waive any events of default or breaches of the trust deed, which occurred on or before the date the amendments are signed and remove the requirement that any replacement trustee be a trust corporation.

Rationale

The issuer said that, following the escalation of the Russia-Ukraine conflict, the United States, the European Union, the United Kingdom and other countries have launched against Russia an expansion of coordinated sanctions and trading restrictions, including new regional embargoes, full blocking sanctions on companies and individuals, sovereign debt restrictions and other sanctions targeting a number of Russian individuals and entities.

The international payments infrastructure makes it “almost impossible,” the issuer said, for it to perform its respective obligations under the notes and to uphold the rights and interest of all noteholders, but it is trying to use all means possible to service the debt under the notes.

The issuer said it believes that the appointment of a new trustee and the amendments would give more flexibility to adapt the existing structure to unpredictably changing regulatory and sanctions environment and avoid obstacles in servicing its obligations under the notes.

Solicitation details

The solicitation runs through 11 a.m. ET on Sept. 28, with a meeting set to take place at 11 a.m. ET on Sept. 29.

Participation may be done only by delivery of a consent instruction to the information and tabulation agent.

The meeting to adopt the extraordinary resolutions requires a quorum of at least one person holding at least two-thirds of the principal amount of outstanding notes to be present or represented at the meeting, and, for approval, the resolutions require two-thirds of the votes cast to be in their favor.

The record date for participation is Sept. 22.

i2 Capital Markets Ltd. (+44 203 633 1212) is the information and tabulation agent.

Celtic Resources is a Dublin-based wholly owned subsidiary of Moscow-based gold mining company Nord Gold SE.

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