Signed, Steeled, Delivered – Financial Restructuring of Metinvest B.V.
A&O advises on U.S.$2.3 billion restructuring of one of the largest corporate groups in Ukraine.
A&O advised Metinvest B.V. on the USD2.3 billion financial restructuring of its vertically integrated Ukrainian steel and iron ore business, involving multiple schemes of arrangement in respect of the bank and bond debt (including the first ever ‘scheme lite’).
The financial restructuring was implemented by way of a two-class UK scheme of arrangement and corresponding Chapter 15 recognition process. During the deal, A&O designed and launched a novel and innovative ‘scheme lite’ product to impose a moratorium on three series of parri passu bonds. This gave Metinvest a stable platform from which to negotiate the wider restructuring with its creditors. The ‘scheme lite’ was eventually used three times and has since been replicated and adopted by the market. Additionally, over a two year period, Metinvest implemented an amend-and-extend consent solicitation with its noteholders, put in place formal standstill arrangements with its PXF lenders, agreed and published a non-binding heads of terms for a restructuring, negotiated and implemented an
inter-dependent restructuring of one of its major US subsidiaries, agreed contractual lock-up arrangements with its noteholders and PXF lenders and negotiated and implemented a two-class scheme of arrangement to complete the restructuring. The deal boosted and stabilised the value of the company’s bonds and positively affected the credit rating of the company as well as its standing in the international debt and capital markets.
“International political and legal significance”
Mark Sterling (Partner, London Restructuring) commented: “This is a restructuring of international political and legal significance and is a huge achievement by all members of the team. What this deal shows is that major Ukrainian corporates are of international standards and this deal will bring forward the moment at which Ukraine renews its ability to access international debt and capital markets.”
The A&O team
The London restructuring team was led by partner Mark Sterling, assisted by associates Rupert Cheetham, Hannah Valintine, Matthew Kimber, Rebecca Le Flufy and trainees Giovanni Chiarli and Pim Fitzpayne.