Russian Standard Ltd., controlled by Russian businessman Roustam Tariko, wants to launch restructuring negotiations with the holders of its defaulted 2022 eurobond secured with a 49% stake in AO Russian Standard Bank, Vedomosti reported Feb 21.
Under two restructuring options proposed by Russian Standard, the company is ready to redeem the bonds for 25% of the principal amount to be paid in cash or for 20% of the principal amount in cash plus contingent value rights to the shares of Russian Standard Bank. The contingent rights option would entitle the bondholders to cash payments linked to the lender's dividend payouts and book value for five years.
The options will be discussed with the bondholders during a March 6 meeting to be held in London. A representative of Roustam Tariko's holding Roust described the proposed restructuring options as "fair," adding that they exceed the current price of the bonds and provide an additional upside for investors, Vedomosti noted.
However, an ad-hoc group of investors holding 27.5% of the defaulted notes already called the proposal "unacceptable" and said they would not attend the March 6 meeting, Reuters reported the same day. The group also maintained its plans to call the notes due and launch court proceedings to enforce the pledged Russian Standard Bank shares.
The bond — of which $451 million is still outstanding, according to Thomson Reuters data — was issued in 2015 as the result of the restructuring of two Russian Standard Bank bond issues amounting to $350 million and $200 million, respectively, with Russian Standard Ltd. being the issuer of new bonds under the restructuring deal. In October 2017, Russian Standard Ltd. missed a coupon payment on the restructured bond, and the Russian National Settlement Depository announced the default of the bond in November that year.