O1 Properties announces successful consent solicitation for 8¼% notes

By Wendy Van Sickle

Columbus, Ohio, March 15 – Russia’s O1 Properties Finance plc announced the successful completion of the consent solicitation for its $350 million of 8¼% notes due 2021 guaranteed by O1 Properties Ltd. in a notice on Friday.

The consent solicitation expired at 11 a.m. ET on March 12, and a noteholders meeting was held at 11 a.m. ET on March 14. The meeting was quorate, and the extraordinary resolution was passed and is effective, according to Friday’s update.

The consent solicitation was launched on Feb. 20 after a previous consent solicitation for the notes was called off.

As previously reported, Riverstretch Trading & Investments Ltd., a company based in Cyprus, acquired 70.038% of class A and 58.391% of class B voting stock of the parent guarantor on July 4, 2018, which constitutes a change of control under the note terms.

If a change of control occurs, the issuer is required to offer to repurchase the notes at 101.

“The parent guarantor continues to hold a portfolio of revenue generating assets and the issuer, the parent guarantor and the new shareholder are confident that the issuer will continue to make interest payments in relation to the notes as they fall due and will redeem the notes at their maturity,” a previous release said.

“However, at this stage the issuer may not have sufficient funds to repurchase the notes pursuant to a change of control offer.”

O1 Properties proposed to revise some existing covenants and insert new covenants under the notes, including covenants relating to the appointment of independent directors to the board of directors of the parent guarantor and the maintaining of a debt service account by the issuer.

Additionally, the issuer planned to enter into an escrow agreement with the trustee and Bank of New York Mellon, London Branch as escrow agent to establish a debt service account to service interest payments under the notes.

The company offered an early consent fee of $30 per $1,000 principal amount of notes for votes cast in favor of the proposal by 11 a.m. ET on March 1. The late consent fee is $15 per $1,000 principal amount.

The issuer said payment is expected to be made no later than March 29.

The solicitation agents are JSC Sberbank CIB (+7 495 787 2363 or liability_management@sberbank-cib.ru) and Sberbank CIB (UK) Ltd. (+44 20 7936 0412 or daria_valkova@sberbank-cib.ru). The information and tabulation agent is Lucid Issuer Services Ltd. (+44 20 7704 0880 or O1properties@lucid-is.com).

As a result of the withdrawal of the previous consent solicitation, no consent fees will be paid or become payable to holders of notes who had delivered a valid consent instruction or a form of sub-proxy voting in favor of the extraordinary resolution under that consent solicitation.

Investment company O1 Properties is based in Moscow.

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