Authorities allowed Ozon to settle with the owners of its bonds for $ 750 million

Ozon has agreed on the terms of early repayment of a $750 million bond loan. In rubles, bondholders will be paid 85% of their face value, in dollars – 67%. The Russian authorities have already allowed Ozon to transfer the necessary funds from Russia to Cyprus.

Ozon agreed with the owners of its bonds

Internet retailer Ozon announced that it had reached an agreement with the committee of holders of its bonds regarding the terms of their early redemption. We are talking about the issue of convertible bonds worth $750 million, which were to be redeemed in 2026.

At the beginning of 2022, American and British stock exchanges stopped trading in shares of Russian companies, including the American exchange Nasdaq stopped trading in Ozon shares. This allowed bondholders to demand their early redemption. At the same time, Ozon could not do this due to restrictions on the withdrawal of capital from Russia.

In June 2022, Ozon agreed with a committee of bondholders representing 21.4% of bondholders to suspend their early redemption of the bonds. Russian holders also joined this agreement, representing the interests of 14.5% of the total.

How Ozon will redeem its bonds ahead of schedule

That is, in total, Ozon was able to agree with the owners of 35.9% of the total number of bonds on the suspension of their right to demand early repayment. Initially, the agreement was valid until August 30, 2022, then it was extended several times, most recently until September 23.


Ozon to redeem $750 million in bonds

Now the terms of their early redemption have been agreed with these bondholders. Ozon is ready to redeem the bonds in rubles or US dollars at the choice of the bondholder. 85% of the nominal value of bonds is paid in rubles, 67% – in dollars. US bondholders will only be able to receive payments in dollars. If all bondholders want to settle in dollars, the company will spend $487.5 million on this without taking into account additional payments.

In both cases, bondholders will also be paid interest accrued before 24 August. Also, bondholders who previously signed an agreement with Ozon to waive the requirement for their early redemption also receive a premium of 1.06% of the value of the bonds. Other bondholders may also join this agreement.

Ministry of Finance allowed Ozon to withdraw funds abroad

These terms are subject to approval by the Noteholders’ Meeting scheduled for October 17, 2022. Noteholders who have previously reached an agreement with Ozon are required to support the proposed terms at this meeting. It is also necessary to obtain permission from the regulatory authorities of the UK and Cyprus (the head office of the company, Ozon Holdings, is registered in this jurisdiction).

To settle with bondholders, Ozon will have to transfer funds from Russian jurisdiction to its Cypriot structure. Ozon claims that the Russian Ministry of Finance has granted the company permission to do so.

VK and Yandex problems with bond holders

Two other public Russian Internet companies, Yandex (the parent company of the Russian Yandex) and VK, have faced similar problems. Trading in Yandex shares was suspended on the Nasdaq exchange, VK shares – on the London Stock Exchange.

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Because of this, Yandex had problems with a bond loan in the amount of $1.25 billion, and VK had problems with $400 million. 957 of its Class A shares (one vote per share).

In early September, VK reported that they were negotiating with bondholders on the terms of their early redemption on an individual basis. By that time, the company had also purchased 58% of the total number of bonds held by the National Settlement Depository (NSD).

Government support

In August 2022, the Kommersant newspaper reported that the Government had approved a RUB 130 billion loan for Ozon, Yandex and VK. in order to ensure the repayment of obligations to bondholders.

The President of Russia also drew attention to the problem Vladimir Putin. In his instruction to the Government, he pointed out the need to introduce the concept of a “fast-growing technology company” into the legislation and provide such structures with conditions for attracting financing in the financial market until the end of 2023 at a level not lower than 2021-2022. (taking into account the financing attracted in the specified period in foreign financial markets).

Igor Korolev

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