FESCO has the ability to service and refinance $450 million until 2020 excluding a repo agreement with VTB (MOEX: VTBR), the company said on Wednesday in a presentation on the main principles of a debt restructuring.In 2013, FESCO raised a repo loan of $150 million from VTB, which it has refinanced a number of times since then. In December, the loan was refinanced in the amount of 61.6 million euro and extended until December 2016. The security for the loan is 24.1% of shares in TransContainer (MOEX: TRCN).
As reported earlier, FESCO is experiencing difficulty making coupon payments on Eurobond issues maturing in 2018 and 2020. At the beginning of May, the company decided not to pay the coupon, resulting in credit rating downgrades to default level.
It was also reported that a group of bondholders, including those with major holdings in Eurobonds maturing in 2018 ($421 million in circulation with a coupon rate of 8%) and in 2020 ($234 million at 8.75%), had submitted their debt restructuring proposals to FESCO on July 15.
FESCO said in the materials that it would reduce debt servicing volumes "to an acceptable level in order to raise operational flexibility and the group's ability to create added value."
Among the fundamental principles of the restructuring, the company names: "assistance for the group's post-restructuring financial and strategic flexibility, preservation of group stability and reduction of the effect on operational activity to a minimum, stimulating shareholders to create added value in the interests of all affiliated parties and maintenance of shareholder control in the interests of the group and affiliated parties."
FESCO emphasizes that it intends to maintain "the ability to fully repay the nominal value of debt for those who believe in the successful rehabilitation of the business."