Myriad Rus LLC, a representative of one of the key members of the group of bondholders (the Ad Hoc Committee), seeks to secure maximum recovery for the holders of the Russian Standard Ltd notes.
In order to secure the recovery, Myriad Rus announces membership enlargement of the group of at least 25 % of the noteholders to request the Trustee to proceed with the enforcement of the Pledges.
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Our company pursues the interests for the benefit of all the bondholders and is not affiliated with Russian Standard Ltd., Russian Standard Bank, Russian Standard-Invest LLC, CJSC Russian Standard Corporation, and Citibank, N.A. London branch, as well as beneficiaries of these companies.
Our objective is to unite at least 25% of the noteholders, who are unaffiliated with the aforementioned companies and do not act in their interests. This is essentially important to ensure the maximum recovery for the holders of the defaulted notes.
If the group of bondholders holds less than 25% of the notes, Myriad Rus intends to commence a collective action at the Arbitrazh Court of the city of Moscow concerning a claim for the protection of violated rights and legitimate interests of all noteholders in order to proceed with the enforcement of the pledges of the shares under Russian law. However, we intend to resort to all remedies under the Trust Deed and Terms and Conditions of the Notes before commencing the enforcement proceedings.
The Russian Standard Ltd Notes, secured by the pledges of 49% of the Russian Standard Bank shares, were issued in 2015 as part of the restructuring of the previously issued Bank’s notes.
The Scheme involved an exchange of the Bank’s securities for the Notes in the principal amount of U.S. $ 451,000,000 13 per cent due in 2022 issued by Russian Standard Ltd.
However, Russian Standard Ltd ceased making interest payments on the Notes, causing occurrence of an Event of Default.
In March, 2018, Russian Standard Ltd held a conference call with noteholders and offered two restructuring proposals whereby noteholders would be paid a sum equivalent to 25% of the principal amount in cash, or payment of a sum equivalent to 20% of the principal amount in cash plus contingent rights to the Bank’s dividend and book value linked cash payments for 2018-2023. The bondholders rejected both proposals.
According to the Trust Deed and Terms of and Conditions of the Notes, after occurrence of an Event of Default the Trustee at its discretion shall, if so by directed by an Extraordinary Resolution or if so requested in writing by holders of at least 25% of the outstanding notes subject to its having been indemnified, be entitled to proceed with the enforcement of the Pledges.
According to the news articles, at least 25% of the bondholders have formed a group represented by a law firm Latham & Watkins.
In March, 2018, Myriad Rus united 1% of the noteholders and attempted to join to the first group, but was refused. In October, 2018, Myriad Rus managed to bring together more than 9.8% of the holders and proposed to the group to join the forces and proceed with the enforcement of the pledges, but was refused again.
In November, 2018 and January, 2019, the Trustee confirmed that it was not requested in writing to proceed with the enforcement of the pledges and was not indemnified to its satisfaction.
Meanwhile, according to the public statements made by the first group of the bondholders, it was intended to proceed with such request back in June, 2018. You can view the public sources here and here.
1. There is no active group of holders of at least 25% of the notes that has requested the Trustee in writing to proceed with the enforcement of the share pledges
2. There is no information regarding intentions of Russian Standard Ltd. to redeem the notes
3. There is no Trustee’s intention to commence the enforcement procedures at its discretion
It can be said that the Issuer benefits from the lack of actions as such situation does not have a negative impact on its finances.
As a result, the notes could remain unredeemed for unlimited period without noteholders’ active approach.
In the meantime, the bondholders are at risk of securing no recovery of their investments due to the fact such wait-and-see position goes hand in hand with the risk of depreciation of the pledges.
For these reasons, we believe that the noteholders’ passive approach is unpromising to secure the recovery their investments.
That is why Myriad Rus has announced formation of the Ad Hoc Committee in order to unite bondholders who are interested in recovering their investments.
Currently, 12 % of the noteholders have joined that Committee. We are not setting restrictions or criteria for joining the Ad Hoc Committee because we are seeking to obtain fair satisfaction of the monetary obligations undertaken by the Issuer for the benefit of all noteholders who are unaffiliated with the Issuer.
Confirming the serious nature of our intentions, the Ad Hoc Committee initiated the issuance of a Notice dated 16 November 2018 informing that the group intends to commence a collective action in order to enforce the share pledges.
Nevertheless, in order to enhance the bondholders’ standing regarding their rights to commence the enforcement procedures directly against the Issuer and for the purposes of compliance with the Terms and Conditions of the Notes, it is necessary to provide the Trustee with an opportunity to perform its obligations as the Pledgee for the benefit of the noteholders upon their request to proceed with the enforcement of the pledges of the shares and to discharge the Russian Standard Ltd obligations.
Myriad Rus protects the stakeholders’ rights and represents Russian and international investors, shareholders and bondholders, as well as provides investment expertise, legal and consulting support for investment projects, enterprises and companies.
Our mission is to improve the corporate climate in Russia. Our core values include achieving and ensuring business sustainability and transparency for all investors.
We build and maintain partnership relations based on effectiveness and transparency principles, pincorporating the best investment, corporate and legal practice to reach compromises and mutually beneficial solutions.
We have completed various projects involving successful protection of rights of stakeholders in public companies, such as PJSC "Ural Bank for Reconstruction and Development", JSC "Biochemist", JSC "Ilim Group", JSC "Ust-Ilim Woodworking Plant", PJSC "Saratovenergo", JSC "Gazpromgeofizika", PJSC "Plus Bank", PJSC "Bank Tavrichesky", JSC "Almetyevsk Pipe Plant", PJSC "Omskshina", and PJSC "Moscow Industrial Bank ".
Myriad Rus LLC
Registered office: 26B bldg. 2, Bolshaya Pochtovaya St., Moscow, 105082
Tel.: +7 (499) 322 96 60, +7 (495) 234 27 79
Branch office: 11 Gogolevsky Boulevard, Moscow, 119019
Represenatives: Andrey Rozhkov and Gyuzel Mursalimova
Tel.: +7 (495) 565-38-80
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