Metinvest CEO expects “some solution” with creditors

Обзоры по компаниям и отраслям 17.04.2015 The CEO of Ukraine’s largest steelmaker and iron ore miner Metinvest (METINV) stated on Apr. 16 that the company has mutual understanding with its creditors. According to him, the company’s creditors acknowledge the solid earnings potential of Metinvest and the current circumstances. Metinvest would reach “some solution” with creditors, which could be implemented, according to the CEO. He blamed increasing VAT receivables that became one of the reasons of the default on USD 113 mln PXF borrowings in March 2015. The CEO stated that VAT receivables reached UAH 3.5 bln (USD 146 mln), comparing to UAH 2.0 bln as of end 2014 (USD 127 mln at the official rate of UAH/USD 15.77). Roman Topolyuk: The wording “mutual understanding with creditors” doesn’t directly imply that the deal with PXF lenders would be inked at once. If that were the case, it could have already materialized without initiating another troublesome voting procedure on the outstanding 2015 Eurobond. On Apr. 29 and May 1 voting is scheduled for another maturity extension of USD 114 mln Eurobond maturing in May. While we believe that the PXF lenders are not inclined to run the steel business in Donbas by themselves, and would have to find some compromise with the management, the timeframe towards reprofiling of the non-public debt is uncertain. We reiterate our negative view on METINV.