“VTB is ready to Finance group FESCO, provided debt restructuring

Moscow. 27 Oct. INTERFAX – VTB is ready to provide transport group FESCO financing, provided debt restructuring, the company reported to “Interfax” first Deputy President – Chairman of management Board Yuri Soloviev.

As reported, at an extraordinary meeting on 27 October, the shareholders of FESCO (the parent company of FESCO group, the largest shareholder of the Summa group Ziyavudin Magomedov) will consider raising up to $750 mln to VTB for refinancing of debt, mainly Eurobonds and ruble bonds.
“The situation with the FESCO group is a relatively complicated story, fundamentally the company is very interesting and actually good, efficiently managed. Unfortunately, looking back, I guess you could say that it was bought at a pretty high price with lots of debt financing. On that cycle that we have gone through over the past three years, the company got into rather difficult financial situation, mainly due to the amount of us dollar denominated debt, which it was encumbered,” said Soloviev.

“Now it is time for potential debt restructuring in such a way that the company itself is that they could serve, return and, ultimately, to reach those financial indicators in relation to the capacity to repay the debt, which was initially planned by the shareholders. We part trying to take in this restructuring and is ready to provide financing for it provided that this restructuring will take place”, – said the first Deputy Chairman of VTB.

The total debt of the group FESCO in August 2017 was $885,1 million Company for a long time carries on negotiations with holders of the debt securities of the group on the restructuring of payments on Eurobonds and ruble bonds.

In early September, the company reached agreement with an ad hoc group of holders of Eurobonds maturing in 2018 and 2020. The terms of the restructuring include a one-time cash payment of $547,5 million “subject to certain deductions specified in the agreement.” The restructuring is subject to several conditions, one of them is the involvement of the group’s investments in equity and/or debt financing in sufficient volume.

FESCO – one of Russia’s largest owners and operators of port infrastructure with integrated rail and logistics businesses, mainly focused on intermodal transportation of containerized cargo. The group “Sum” Ziyavudin Magomedov owns a 32.5% stake in the parent company of the holding – OJSC “far Eastern shipping company” , 23.8 per cent from GHP Group, is 17.4%, and 4.9% – East Capital.

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