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FESCO agrees key terms of USD Notes restructuring and enters into Standstill and Lock Up Agreement with bondholders

6 September 2017

Far-Eastern Shipping Company PLC and its subsidiaries (together the “Group”) announce today that the Group and an ad hoc group of bondholders (the “Ad Hoc Group”), representing 47.34% of the outstanding 8.00% Senior Secured Notes due 2018 and 8.75% Senior Secured Notes due 2020 (together the “USD Notes”), have agreed the key terms for restructuring the Group’s indebtedness under the USD Notes (the “Restructuring”) and have entered into a standstill and lock-up agreement (the “LUA”) to facilitate the implementation of the Restructuring.

The Restructuring terms comprise of a one-time cash payment of USD 547.5m, subject to certain deductions as set out in the LUA. The Restructuring is conditional upon:

  • - The Group successfully raising new equity investment and/or debt financing in a sufficient amount and
  • - A majority of the noteholders (representing at least 75% of the outstanding USD Notes (by value) and a majority in number) supporting the Restructuring pursuant to a UK Scheme of Arrangement.

The purpose of the LUA is to facilitate the implementation of the Restructuring via a UK scheme of arrangement. Pursuant to the terms of the LUA, in return for the bondholders’ agreement to forbear from taking any enforcement actions on the basis of certain identified events of default under the USD Notes as well as to take actions to support the Restructuring, each bondholder who accedes to the LUA before 4 October, 2017 will be entitled to receive a lock-up fee in the amounts described in the LUA. The LUA will terminate on 31 October 2017, subject to certain termination events and an extension option.

The Group strongly encourages other holders of the USD Notes to accede to the LUA in support of the Restructuring, which the Group believes to be the optimal mutually beneficial solution for both bondholders and the Group. Bondholders interested in receiving more information regarding the LUA or in acceding to the LUA are directed to follow the link http://www.fesco.ru/en/investor/corporate-bonds/debt-restructuring/.

The LUA is the result of the Group’s successful negotiations with the Ad Hoc Group following the Group’s previously announced strategic review of its capital structure in May 2016, after it was affected by the weakening of the Russian macroeconomic environment and rouble devaluation. The Group would like to express its gratitude to the Ad Hoc Group and its advisors for their commitment to this constructive dialogue. The Group believes that the Restructuring will de-lever it to a sustainable level, allowing it to remain operationally competitive and ensuring the viability of the business going forward.

Investor Contacts

Dmitriy Ivanov, FESCO

+7(495)7806001 ext. 11160

ir@fesco.com

Media Contacts

Maria Kobzeva, FESCO

+7(495)7806001 ext. 11014

pr@fesco.com

Further details may be obtained from the Information Agent appointed in respect of the lock-up agreement:

Information Agent

Lucid Issuer Services Limited

Tankerton Works

12 Argyle Walk

London WC1H 8HA

Contacts:

Email: fesco@lucid-is.com

Attention: Victor Parzyjagla / Alexander Yangaev

 

Or the advisors appointed in respect of the Restructuring, as below:

Advisors to the Company

Advisors to the AHG

Cleary Gottlieb Steen & Hamilton LLP

City Place House, 55 Basinghall Street

London EC2V 5EH, England

Contacts:

Polina Lyadnova (plyadnova@cgsh.com)

Andrew Shutter (ashutter@cgsh.com)

-and-

Houlihan Lokey

83 Pall Mall

London SW1Y 5ES, England

Contacts:            

Joseph Swanson (jswanson@hl.com )

Bryan Goudzwaard (bgoudzwaard@hl.com)


Dechert LLP

160 Queen Victoria Street,

London EC4V 4QQ, England

Contacts:            

Camille Abousleiman (cabousleiman@dechert.com)

Giles Belsey (giles.belsey@dechert.com)

-and-

Rothschild & Cie

23bis Avenue de Messine,

5008 Paris, France

Contacts:            

Arnaud Joubert (arnaud.joubert@rothschild.com)

Giovanni Salvetti (giovanni.salvetti@rothschild.com)

Simon Bard (simon.bard@rothschild.com)

IMPORTANT NOTICE:

These materials are not intended to and do not constitute investment advice. These materials do not constitute or form any part of and should not be constructed as an offer or commitment to sell or issue, a solicitation, recommendation, commitment or invitation to subscribe for, underwrite or otherwise acquire, and should not be construed as an advertisement for, any securities of the Issuer or any member of its group in any jurisdiction or an inducement to enter into investment activity in any jurisdiction.

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