Restructuring of a Debt Portfolio Exceeding RUB 85 Billion
Situation:
A major metals company (the “Company”) sought assistance with the restructuring of its loan portfolio following a significant deterioration in its financial performance, which resulted in a liquidity shortfall and the Company’s inability to fully service its obligations to creditors.
Key Project Milestones:
- From the outset of the project, our team assumed a coordinating role and provided comprehensive support to the Company in negotiations with its lending banks, effectively acting as the Company’s finance function;
- A comprehensive analysis and verification of the Company’s financial model was conducted, together with a detailed assessment of its debt burden and debt service schedule, enabling the development of a solution aimed at restoring the Company’s liquidity and solvency;
- Additional financing was arranged to repay the Company’s public debt, ensuring the timely fulfillment of its obligations to debt holders;
- The restructuring terms were developed and substantiated to the lenders, including a grace period for principal repayments, the introduction of a preferential interest rate, the cancellation of the existing loan servicing fee, and a reduction in the restructuring fee;
- Under the guidance of our team, the loan and security documentation package was successfully negotiated and executed on favorable terms for the Company, in full compliance with the requirements and deadlines of the lending banks.
Results:
As a result of the project, the Company successfully raised RUB 13 billion in additional financing and fully restructured more than RUB 85 billion of debt obligations. The Company secured a three-year grace period for principal repayments, as well as a preferential interest rate equal to 2/5 of the Bank of Russia Key Rate for a period of 13 months, significantly reducing its current debt burden and releasing substantial liquidity for operating activities.
In addition, the existing loan servicing fee was eliminated and the restructuring fee was reduced, generating a significant positive economic effect on the Company’s debt servicing costs. The agreed terms enabled the Company to restore its solvency and maintain its financial stability.