Metinvest B.V. (the Netherlands), the parent company of the Metinvest mining and metallurgical group, will buy back all 2021 eurobonds previously issued by the company for $ 115.3 million and part of 2023 eurobonds for $ 193.2 million, according to Metinvest B.V.’s report on the first results of obtaining consent to buy back its eurobonds maturing in 2021 and 2023 and the issue of new eurobonds.
According to the document, there are currently 2021 eurobonds in the amount of $ 115.3 million in circulation, and with amendments and recalculation with a fixed interest rate, $ 118.020 million will be spent on their redemption.
Currently, there are also 2023 eurobonds for a total of $ 504.515 million in circulation, while within the first stage (with the end of acceptance on September 28) applications for the redemption of these bonds for the amount of $ 193.227 million were accepted.
As reported, Metinvest is placing seven-year eurobonds worth $ 333 million with a yield of 7.95%. The demand for eurobonds exceeded $ 1.6 billion.
Metinvest, the largest Ukrainian mining and metallurgical holding, has offered the buyback of its eurobonds maturing in 2021 and 2023 for a total amount of up to $ 290 million, in particular through the issue of new eurobonds.
The purpose of the offer is to proactively manage and extend the maturity of the issuer’s debt, and leverage favorable market conditions to refinance bonds to provide a more stable and long-term capital structure with a lower refinancing risk, the company said on the website of the Irish Stock Exchange.
Metinvest reminds that its 2021 eurobonds with a par value of $ 115.31 million and 2023 eurobonds with a par value of $ 504.52 million are in circulation. According to the proposal, the volume of redemption of 2023 eurobonds is limited by the condition to keep this issue in circulation in the amount of at least $ 300 million. In particular, it is indicated that if all 2021 eurobonds are submitted for redemption, the volume of redemption of 2023 eurobonds will amount to $ 164.25 million.
Metinvest also said that it had already received information from the holder of 2021 eurobonds for $ 80.8 million about the intention to make such a buyout. If this intention is confirmed, then for the general agreement on the operation of these securities, the participation of the holders of these bonds for about $ 5.7 million will be required.
According to the promulgated terms, 2021 eurobonds are redeemed at a price of 103% of the face value, 2023 eurobonds at 104.25% of the face value.
Redemption applications are accepted until September 28 inclusive. The earliest expected settlement date is October 1, the final one is October 16.
Metinvest B.V. (the Netherlands), the parent company of the Metinvest mining and metallurgical group, in January-June 2020 reduced capital investments by 35% compared to the same period in 2019, to $ 313 million.
According to preliminary unaudited interim financial results for the first half of 2020, the capex reduction was planned during this period.
“In line with the group’s 2020 capex priorities for critical asset maintenance and the completion of ongoing strategic investment projects, investments in maintenance and repairs decreased by 33%, while investments in strategic projects were reduced by 38%, which brought their share in capital investments to 65% and 35%, respectively (63% and 37% in the first half of 2019),” the report states.
At the same time, it is clarified that the metallurgical segment accounted for 47% of capital investments (50% in the first half of 2019), and the mining segment for 49% (46% in the same comparison).
The Northern Mining and Processing Plant (Northern GOK, Kryvy Rih, Dnipropetrovsk region), which is the part of the Metinvest Group, will invest UAH 2.3 billion in environmental protection measures in 2020.
Metinvest Kryvyi Rih said on Facebook on Thursday, August 20, that Northern GOK continues seeking effective ways of environmental protection.
“This time peat hydroxide reagent was successfully tested during the blasting operations in the mine. Earlier, spraying of the reagent in the Hannivsky mine helped to reduce dusting by 30% and gas emission by 70%,” it said.
As reported, Metinvest plans to invest UAH 3.1 billion in the modernization and overhauls of equipment and construction of strategic facilities at Northern GOK in 2020.
Northern GOK is a part of the Metinvest Group, the main shareholders of which are JSC System Capital Management (SCM, Donetsk) (71.24%) and Smart Holding group of companies (23.76%).
The holding company of the Metinvest Group is Metinvest Holding LLC.
Revenue of Metinvest B.V. (the Netherlands, the parent company of the Metinvest group of steel and mining companies, grew by 13.6% in May 2020 compared with the previous month, to $843 million from $742 million.According to unaudited operational results posted by the company on Tuesday, EBITDA in May was $162 million, which is $36 million more than in April ($126 million), EBITDA from participation in JV was $16 million ($15 million in April).
According to the report, adjusted EBITDA of the metal division of the group in May 2020 totaled $39 million ($64 million in April), including minus $6 million from participation in JV (minus $1 million), EBITDA of the mining division was $112 million ($94), including from participation in JV $22 million ($16 million). Expenses of the managing company were $7 million ($6 million).
Total revenue consisted from revenue of the metal division in the amount of $631 million ($580 million in April), revenue of the mining division totaling $291 million ($240 million) and intra-group sales totaled $79 million ($78 million).
Total debt grew by $25 million in May, to $3.098 billion. At the same time, the amount of cash decreased by $10 million, to $260 million from $270 million.
The funds used in investing activities amounted to $95 million, in financial activities $27 million.
Moody’s Investors Service has upgraded corporate family rating (CFR) and probability of default rating (PDR) of Metinvest B.V. (Metinvest) to B2 from B3. Concurrently, the rating outlooks on Metinvest’s ratings were revised to stable from positive, Moody’s has said in a press release.
The stable outlook on Metinvest’s ratings is in line with the stable outlook on Ukraine’s sovereign rating, and reflects Moody’s expectation that the company will sustain strong operating and financial performance for their rating level and will maintain healthy liquidity.
Metinvest has fairly broad goals of reducing environmental footprint and introducing more efficient energy-saving technologies in order to meet the best global standards in this area. In 2019, Metinvest spent around $384 million (2018: $263 million) in environmental projects, including $155 million of capital spending.
“Being a vertically integrated company, Metinvest takes responsibility for the whole production chain and continues to improve the environmental footprint of its segments,” Moody’s said.
The corporate governance risks are mitigated by the fact that Metinvest demonstrates a good level of public information disclosure, including a track record of regular public reporting of audited consolidated financial statements prepared in accordance with IFRS as well as quarterly operational reporting.
Metinvest Group is a vertically integrated group of steel and mining companies that manages every link of the value chain, from mining and processing iron ore and coal to making and selling semi-finished and finished steel products. It comprises steel and mining production facilities located in Ukraine, Europe and the United States, as well as a sales network covering all key global markets.
