Ozon seeks holder consents to restructure 1.875% convertibles due 2026

By Marisa Wong

Los Angeles, Sept. 23 – Ozon Holding plc issued an update related to its $750 million 1.875% senior convertible bonds due 2026 (ISIN: XS2304902443).

The company and an ad hoc group of bondholders have reached an agreement with respect to the terms of a restructuring of the bonds.

The terms of the bonds will be amended through a consent solicitation process to allow the company to redeem the bonds

• If the relevant bondholder is outside the United States and a non-U.S. person and elects for redemption in rubles at an amount in rubles representing 83% of the principal amount outstanding (converted at the dollar/ruble exchange rate of the Central Bank of Russia as of Sept. 23) plus accrued interest up to and including Aug. 24, or

• If the relevant bondholder is in the United States or a U.S. person and elects for redemption in dollars or does not make an election, at an amount in dollars representing 65% of the principal amount outstanding plus accrued interest up to and including Aug. 24.

The company intends to fund the redemption primarily by upstreaming funds from its Russian subsidiaries, and the company has obtained the approvals from Russia’s Ministry of Finance to allow such upstreaming for the purposes of the retructuring.

The restructuring is conditioned on authorizations and governmental approvals from the European Union, United Kingdom and United States and subject to Russian law and regulations.

Lock-up agreements

To support implementation of the restructuring, on Sept. 23 the company and the members of the ad hoc group representing 21.4% of the principal amount of outstanding bonds entered into a lock-up agreement.

In addition, on the same day the company and some Russian bondholders representing 14.5% of the principal amount outstanding also entered into a separate Russian lock-up agreement, which in form and substance is substantially similar to the lock-up agreement with the ad hoc group members.

The lock-up agreements came into effect on Sept. 23, and the bondholders that are a party to those agreements represent 35.9% of the principal amount of outstanding bonds.

According to the terms of the lock-up agreements, the bondholders agreed, among other things, not to dispose of their bonds and, subject to compliance with laws and regulations in all respects, including relevant sanctions, to vote in favor of the restructuring.

The lock-up agreements will terminate on Nov. 22, subject to some early termination events and extension options.

Each non-sanctioned bondholder party to or acceding to the relevant lock-up agreement prior to 11 a.m. ET on Oct. 14 who submits valid instructions will be eligible to receive a 1.0625% lock-up fee, payable upon completion of the restructuring.

Further information on the lock-up agreements may be found at https://ir.ozon.com/restructuring or obtained by contacting Houlihan Lokey EMEA, LLP, the financial advisor to the ad hoc group of bondholders, at projectondohl@hl.com or Cleary Gottlieb Steen & Hamilton LLP, the legal advisor for Ozon, at Project-Ozon-CGSHOnly@cgsh.com.

Deed poll

Ozon said it entered into a deed poll dated Sept. 23, under which it undertakes to settle any conversion rights exercised by the bondholders in cash until the bonds are redeemed in full and cancelled.

Bondholder meeting

The company said it is convening a physical meeting of bondholders to consider and pass extraordinary resolutions in relation to consents and amendments to the terms and conditions of the bonds in order to implement the restructuring.

The company is soliciting the consent of the bondholders (other than bondholders in the United States, except QIBs) to the consents and amendments.

The meeting will be held at 9 a.m. ET on Oct. 17 at the London offices of Cleary Gottlieb Steen & Hamilton LLP.

The deadline for voting instructions is 11 a.m. ET on Oct. 14.

Ozon is a Russian e-commerce and internet company. The holding company is registered in Cyprus.

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