Metinvest Bondholder Group Said to Oppose Moratorium Request

  • Steelmaker wants to freeze payments on $1.1 billion of bonds
  • London Court allows creditor vote on debt restructure plan

A group of Metinvest BV bondholders is trying to derail the Ukrainian steelmaker’s efforts to partially halt payments on its $1.1 billion of notes, according to two people familiar with the matter.

The investors, including Pioneer Investment Management Ltd., own less than the 25 percent threshold of bondholdings required to block the standstill in U.K. courts and are seeking more backers, the people said. A separate group advised by PJT Partners Inc., which holds 51 percent of Metinvest’s notes, has approved the proposal in principle, the High Court in London was told on Wednesday.

Metinvest is struggling to repay borrowings amid a plunge in steel prices and after a war in eastern Ukraine damaged many of its factories, mines and transport facilities. The company has asked to suspend some of the payments, including on $85 million of notes due on Jan. 31, as it works with Rothschild on plans to restructure its $3 billion of bonds and loans.

Spokeswomen at Pioneer and Rothschild in London declined to comment on the talks. Officials at PJT in London and at Metinvest in Kiev also declined to comment.

The High Court granted Metinvest permission to summon bondholders to vote on the moratorium on Jan. 27. The proposal will be approved if it’s supported by holders of 75 percent of the bonds.

The steelmaker reached an agreement last month with bank lenders to halt loan payments until the end of January. The company is seeking to extend the maturities of all notes and pre-export finance loan facilities, it said last month.

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