LONDON, Feb 24 (Reuters) - Ukrainian steel giant Metinvest is exploring whether it could issue new debt to cover a near $430 million bond payment due in April that it has also been in talks to
Metinvest Weighs Bond Issue as $428 Million Payment Approaches
LONDON, Feb 24 (Reuters) - Ukrainian steel giant Metinvest is exploring whether it could issue new debt to cover a near $430 million bond payment due in April that it has also been in talks to potentially restructure, its chief executive has told Reuters.
Metinvest remains Ukraine's largest private company, but the country's four punishing years of war with Russia has seen it lose roughly half of its operations, including some of its biggest steel and coal facilities.
Refinancing Options and Market Context
Earlier this month, it paused talks with a group of its bondholders about restructuring $1.25 billion of its debt, saying it would explore "alternative liability management transactions".
Speaking to Reuters about Tuesday's four-year anniversary of the war, Metinvest CEO Yuriy Ryzhenkov laid out the impact the conflict has had and the options for its finances.
Bond Issuance Scenarios
He said it was looking at "many avenues", especially after poultry giant MHP last month became the first Ukrainian company since the full-scale war broke out in 2022 to sell an international bond.
"At the moment we're listening to what the market is saying, what they (investors) can be comfortable with," Ryzhenkov told Reuters by phone.
3- vs 5-year Tenor
"We would be comfortable to go with a 3-year bond, we would be comfortable to go with a 5-year. It obviously depends on the other details, on the covenants and the cost of the debt. So we'll have to strike some sort of a balance."
ACCEPTABLE COST?
Pricing Versus MHP Benchmark
Bankers say Metinvest would probably have to pay 1-2 percentage points more than the 10.5% MHP paid last month to borrow $450 million over three years.
Is the Cost Sustainable?
That would be a high price and not sustainable in the long term, Alan Siow, Co-Head of EM Corporate Debt at Ninety One said. But it would mean the firm retains market access and could then refinance at a better level if and when the situation improves.
Alternative Funding Routes
Ryzhenkov said Metinvest's other possibilities included a private debt deal, using the firm's existing resources, or going back to the restructuring options discussed in recent months.
Using Cash on Hand
If it did opt for a bond, Ryzhenkov added there was leeway on how much it would need to borrow. It has a $428 million payment to make by April 23, but has got some cash it could utilise.
Potential Size: $300m–$500m
"Depending on the conditions from the market, we can go for $300 million (bond) or we can go for $500 if the conversations are good, if the cost is acceptable."
Deutsche Bank Roadshow
Investor Outreach and Timeline
A spokesperson for Deutsche Bank, which helped organise a recent roadshow with Metinvest investors, didn't immediately respond to a request for comment on the potential for a bond sale.
Decision Window and Fallback
Ryzhenkov said Metinvest still had some time before a decision needed to be taken and that he was taking an optimistic view.
"Either we find the market solution which will basically resolve everything, or we will have an agreement with our creditors (to reprofile the bond)," he said.
(Reporting by Marc Jones; Editing by Toby Chopra)
