Ukrzaliznytsia seeks to amend, extend $500 million 9˝% notes due 2018

By Susanna Moon

Chicago, Dec. 9 – Ukraine’s Ukrzaliznytsia said it reached an agreement with an ad hoc committee to “re-profile” its $500 million 9˝% loan participation notes due May 21, 2018 and the underlying loans.

Ukrzaliznytsia expects to implement the changes through a consent solicitation to exchange the notes for new notes with revised terms, according to a company press release.

The company said it recently conducted negotiations with a group of asset managers consisting of ICE Canyon LLC, Portland Worldwide Investments Ltd., Promeritum Investment Management LLP and VR Global Partners, LP, who formed an ad hoc committee.

As part of the changes, the coupon will be increased to 9 7/8% from 9˝%, effective Nov. 21, and the maturity will be extended to Sept. 15, 2021 from May 21, 2018.

Also, the amortization schedule will be modified as follows:

• 60% of the outstanding principal amount in 2019: 30% on March 15, 2019 and 30% on Sept. 15, 2019;

• 20% of the outstanding principal amount in 2020: 10% on March 15, 2020 and 10% on Sept. 15, 2020; and

• 20% of the outstanding principal amount in 2021: 10% on March 15, 2021 and 10% on Sept. 15, 2021.

The interest payment dates will be changed to March 15 and Sept. 15.

Also, the following modifications will be discussed in good faith when the documentation for the re-profiling is finalized:

• Increase of capacity to incur debt secured over future revenues under the loan agreements terms by $250 million;

• Extension of the seven-day period under the loan agreements terms to 60 days; and

• Amendments to the documentation required to reflect the reorganization of Ukrzaliznytsia, including waiver of any breach that may have occurred or may occur in connection with implementation of the reorganization.

The changes to the note terms requires holder consent and regulatory approval.

“The re-profiling is being implemented at a time when Ukrzaliznytsia is undergoing a historical reorganization that will completely change how we operate,” Oleksandr Viktorovych Zavgorodniy, acting chairman of the management board of PJSC Ukrainian Railway, said in the press release.

“We believe that the reorganization will not only make internal processes more efficient and flexible, but that it will also make Ukrzaliznytsia’s group structure more transparent to investors and partners.”

PJSC Ukrainian Railway is a legal successor of the State Administration of Railways Transport of Ukraine, the six regional railway enterprises and other railway transport enterprises, which were combined as a result of the reorganization, effective Dec. 1.

Ukrzaliznytsia is a Kiev-based rail transport agency.

© 2015 Prospect News.
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