Narrative
Full Description
Project narrative
On September 6, 2010, Southern Kuzbass Coal Company OAO — a subsidiary of Russian mining and metal company Mechel OAO — signed a 3-year, $857,142,858 pre-export finance (PxF) facility agreement with a syndicate of banks for debt refinancing purposes. Then, on September 10, 2010, Yakutugol Holding Company OAO — a subsidiary of Russian mining and metal company Mechel OAO — signed a 5-year, term loan (PxF) facilities agreement worth approximately $1 billion with a syndicate of banks for debt refinancing purposes. More specifically, the borrowers were expected to use the loan proceeds to refinance the outstanding debt obligations of Russian mining and metal company Mechel OAO under two (previously contracted) syndicated PxF facilities — a $2 billion facility for the acquisition of OJSC Yakutugol and a $1 billion facility for the acquisition of Oriel Resources Ltd. Participants in the September 2010 syndicated PxF facilities included BNP Paribas SA, Commerzbank Aktiengesellschaft, ING Bank N.V., Natixis, Raiffeisen Bank International AG, Société Générale, UniCredit Bank AG (formerly known as Bayerische Hypo-und Vereinsbank AG), VTB Bank (Austria) AG, VTB Bank (Deutschland) AG and VTB Bank (France) SA. Then, on December 4, 2012, a syndicate of 11 banks — including ICBC (London) plc — signed a $1 billion syndicated PxF facility agreement with Southern Kuzbass Coal Company OAO for debt refinancing purposes. The loan carried a maturity of approximately 2.674 years (final maturity date: August 7, 2015), a grace period of 12 months, an annual interest rate of 1-month LIBOR plus a 5% margin, and a 2% default (penalty) interest rate. The borrower was responsible for making equal monthly repayment installments. Several sources of collateral were pledged in support of the loan, including the assets of the borrowing institution, Mechel OAO equity stake in the borrowing institution, and the cash proceeds from future mining export receipts under multiple offtake contracts (deposited in an offshore collection account). The loan commitment was based upon an amendment and restatement agreement of the $857,142,858 facility agreement that Southern Kuzbass Coal Company OAO signed on September 6, 2010. The December 2012 PxF facility was expected to improve the liquidity position of Mechel. Record ID#98626 captures ICBC (London) plc’s contribution to the December 2012 PxF facility. In addition to ICBC (London) plc, the following lenders contributed to the syndicate: ING Bank N.V., Société Générale S.A. (SocGen) UniCredit AG, BNP Paribas S.A., ABN AMRO Bank N.V., Commerzbank Aktiengesellschaft, Raiffeisen Bank International AG, VTB Bank, Natixis, and Caterpillar Financial Services Corporation. ING Bank, SocGen, UniCredit, ABN Amro, and Rosbank (non-lender) served as coordinators. Then, in November 2013, a syndicate of at least eight banks — including ICBC (London) plc — signed an amendment agreement with Yakutugol Holding Company OAO and Southern Kuzbass Coal Company OAO for the $1 billion PxF facility. In this agreement, the bank syndicate extended the grace period until the end of 2014 (an extension by one year for a new grace period of two years) and the maturity until the end of 2016 (an extension by approximately 0.333 years for a new maturity of three years). It also offered a covenant holiday amidst difficult market circumstances, moving $600 million of repayments from 2013/14 to 2015/16. Record ID#98627 captures ICBC (London) plc’s participation in the November 2013 debt restructuring. In addition to ICBC (London) plc, the November 2013 amendment agreement included the following syndicate members: ING Bank, SocGen, UniCredit, Commerzbank Aktiengesellschaft, Raiffeissen Bank International AG, VTB, and Caterpillar Financial Services Corporation. ING Bank, SocGen, and VTB Capital served as coordinators. Then, in January 2018, the bank syndicate signed another amendment agreement with Yakutugol Holding Company OAO and Southern Kuzbass Coal Company OAO for the $1 billion PxF facility. The lenders agreed to extend the loan’s final maturity until the first quarter of 2022 and reduce the loan interest rate from 1-month LIBOR plus a 5% margin to 1-month LIBOR plus a 3.5% margin ((with the possibility of a further reduction to 1-month LIBOR plus a 3% margin). However, it is unclear if ICBC (London) plc participated in the January 2018 amendment agreement.