Anglo American shrinks trading unit as part of major restructuring
The miner also announced internally that it will no longer enter into long-term deals to buy commodities that it doesn’t already produce.
Russian steel and mining company Severstal has received permission from Moscow to make a $12.6 million interest payment due Wednesday on its dollar bonds, but the firm warned that paying and transfer agent Citigroup Inc. may refrain from processing the transaction.
“At the moment we certify that there are no obstacles from Russian law side for the company to make the payment,” Severstal said in a Wednesday filing. But, it added, “given the recent developments around the company, we have grounds to believe that” Citigroup won’t process the coupon payment.
A representative for Citigroup was not immediately available to comment.
Severstal’s interest payment is due to holders of $800 million in so-called loan participation notes that mature in 2024. The debt, which pays an annual rate of 3.15%, was issued by Luxembourg-based unit Steel Capital.
Severstal, among the firms included in the European Union’s sanctions list, said it’s “committed to fulfill its obligations,” and that it received permission from the “competent Russian authorities” to make the interest payment in dollars. If the interest payment isn’t processed, the company said it will pursue “alternative options” to pay its creditors, without providing further details.
According to a decree from March 5, Russian debtors must make payments to creditors from “countries that engage in hostile activities” against Russia in rubles, regardless of the currency the debt was issued in. Redenominations of outstanding debt are typically considered defaults by credit rating firms.
The decree allowed exceptions to pay in currencies other than rubles to foreign creditors from countries that have not imposed sanctions on Russia following the invasion of Ukraine. Companies need a special permission from the Ministry of Finance to make such payments.
Last week palladium producer MMC Norilsk Nickel had said it was cleared to pay off its foreign debts in currencies other than the ruble.
Until March 11, creditors of Russian companies with principal or interest payments due had been getting paid in the contractually agreed currency, regardless of where they were based.
Fertilizer maker EuroChem’s $19.25 million interest payment due on Monday had not been processed as of Wednesday, according to people familiar with the matter who asked not to be identified discussing a private transaction. The payment has to be made by the Irish subsidiary that issued the notes, but the payment is blocked with the bank-paying agent, one of the people familiar said. The paying agent in this case is also Citibank, according to Bloomberg data. A representative for EuroChem declined to comment.
Citibank is the paying agent for Russia’s sovereign bonds with $117 million coupon payments due on Wednesday.
(By Irene García Pérez and Giulia Morpurgo, with assistance from Jack Farchy)
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