FESCO Pens USD 680 Mn Credit Facility

Nov 8, 2017

Russian transportation and logistics firm Far-Eastern Shipping Company (FESCO) has inked a USD 680 million debt financing deal with VTB Bank.

FESCO plans to use the credit facility to repay and/or settle a significant portion of its existing financial liabilities.

PJSC Commercial Port of Vladivostok, a member of the group, will act as the borrower under the facility agreement.

FESCO said that the credit line will be extended for 5 years to finance payment of the settlement amount to scheme creditors to restructure the group’s indebtedness.

The proceeds would also be used for refinancing repurchased notes facility and other debt restructuring purposes.

At the end of October, FESCO said that it had obtained a guarantee approval from the majority of its shareholders for outstanding senior secured notes totaling around USD 644 million.

The notes consist of 8% senior secured notes due 2018 and 8.75% senior secured notes due 2020.

In addition, the group confirmed that the standstill and lock-up agreement dated September 6, 2017 between FESCO and certain members of the ad hoc group of holders of the USD Notes terminated automatically on October 31, 2017.

To remind, the restructuring terms agreed upon in September included a one-time cash payment of USD 547.5 million, subject to certain deductions. The restructuring was conditional upon the group successfully raising new equity investment and/or debt financing in a sufficient amount and support from majority of the noteholders, representing at least 75% of the outstanding USD Notes.

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