Metinvest BV’s latest proposal to restructure more than $3 billion of debt was blocked by a group of bond holders Monday, according to two people familiar with the matter.
Ukraine’s largest steelmaker failed to gather enough votes from holders of notes that matured on May 20 to allow the company to delay payment to next year of some of the money owed, said the people, who asked not to be identified because the deal is private. The group of investors, which includes Marathon Asset Management and Noster Capital, is advised by law firm Kirkland & Ellis, said the people. The company said in a statement Tuesday the meeting held on June 1 would be rescheduled.
Metinvest is seeking to restructure its debt after conflict in the east of the country damaged factories and mines, reducing revenue and access to international credit markets. The company offered to pay 25 percent of $114 million of outstanding bonds on June 20 and the remainder in January. Investors had rejected an earlier proposal to pay 10 percent of the bonds’ face value.
Creditors want more money before the company tackles the restructuring of bonds and loans due by 2019, the people said.
Andriy Bondarenko, a spokesman at Metinvest in Geneva, and officials at Noster in London declined to comment. Ryan FitzGibbon, a New York-based spokeswoman for Marathon employed by Prosek, declined to comment.