Creditors of Russian aluminum giant Rusal have voted to pay half of nearly $1bn
Other holders of Rusal Capital’s Dublin-listed Eurobonds agreed last Thursday to accept alternative coupon payments in Russian currency on $490 million of bonds maturing next May, according to stock market reports. A vote on the second tranche of the Notes, due in February, was postponed to January 10 after an extraordinary resolution meeting of the Noteholders failed to achieve a quorum.
Accepting an alternative payment mechanism means the company, unable to conduct dollar transactions due to sanctions against Russia’s National Settlement Depository (NSD), can avoid defaulting on the bonds. The payment device is identical to that of the
The Russian Treasury in June to meet its dollar-denominated foreign debt obligations that have defaulted after the Russian government was locked out of the international financial system following its attack on Ukraine last February.
Payments are held in rubles at the NSD, and bondholders must open ruble accounts to receive the funds and wait until sanctions are lifted to withdraw them.
Rusal had already urged holders of $1 billion in Eurobonds to accept deferred coupon payments in July after Western sanctions made it impossible to send them in dollars. In a regulatory filing at the time, the company said it was unlikely to create a new payment mechanism before the next interest payments were due and was seeking a deferral.
The company applied to defer coupon payments until the bonds mature in February 2023 and May 2023.
At the time, Rusal said the company and the bond’s guarantors were “confident in their ability to pay their debts,” but “events and circumstances have resulted in significant disruption to the … payment infrastructure.” Rusal owns the Aughinish Alumina plant in Co Limerick. EU-sanctioned Russian oligarch Oleg Deripaska is a major shareholder in Rusal through his company En+.
https://www.independent.ie/business/irish/holders-of-rusals-dublin-listed-bonds-to-take-payment-in-roubles-on-half-of-nearly-1bn-bonds-42245541.html Holders of Rusal bonds listed in Dublin will accept payments in rubles for half of the nearly $1 billion bonds