PAO Sovcomflot (MOEX: FLOT) (‘the Company’) provides an update on the next coupon payment due on 26 April 2022 related to Eurobonds issued by SCF Capital Designated Activity Company, Ireland (‘the Issuer’), with maturity on 26 April 2028 (ISIN: XS2325559396) (‘the Notes’), guaranteed by the Company (‘the Guarantor’).
The sanctions against the Issuer and the Guarantor imposed by the European Union on 15 March 2022 and by the United Kingdom on 24 March 2022, impede proper discharge of obligations under the Notes: the payment agent has refused to accept payment from the Issuer or Guarantor and make coupon payments to Eurobond holders.
The Company, being a responsible and trustworthy borrower on the Russian and international capital markets, confirms its commitment to fully discharge obligations under the Notes and takes all possible actions to ensure the coupon payment is made in accordance with the issuance documents.
SCF Group remains financially sustainable and has financial resources necessary to to meet its obligations, including the next USD 8,277,500 coupon payment. As reported in the Company’s consolidated financial statements as at 31 December 2021, its cash and cash equivalents amounted to USD 0.6 billion.
Considering the situation with interest payments on similar Eurobond issues by other Russia-related issuers, the Company has initiated, in advance, all necessary steps to obtain special licenses from the Office of Financial Sanctions Implementation (the OFSI) and clarifications from the competent sanctions implementation authorities in the EU that would allow the Issuer or the Guarantor to pay the coupon under the Notes*.
The Company will keep the Noteholders and other interested parties informed of the progress of the submitted license applications. The Company looks forward to promptly settling the coupon payment issue in favour of Noteholders and recommends that Noteholders also apply to the OFSI and the EU authorities for licenses that would allow receiving coupon payments under the Notes from the paying agent.
At present, SCF Capital Designated Activity Company, Ireland, has two outstanding Eurobond issues for the total amount of USD 928 million with maturities in 2023 and 2028.
The Notes were delisted by the Irish Stock Exchange (Euronext Dublin) on 12 April 2022, without proper notification to the Issuer and the Guarantor. The delisting from the Irish Stock Exchange will not in itself adversely affect the Company’s ability to service its liabilities under the notes, nor will it limit in any way the holders’ rights with respect to the notes or payments to be made under them.
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* To the extent such an authorization is necessary for financial institutions, clearing organizations and other parties involved in the processing of coupon payments under the Notes, pursuant to the applicable sanctions.