Russian steelmaker Severstal announced on Friday that it could not pay the remaining coupon for the issuance of $800 million in Eurobonds due on March 16 nor the issuance of 750 million due on April 17. The company said in a statement:Due to lack of regulatory approvalsTechnically Severstal can’t pay “the coupons for these two bond issues.” Severstal remains committed to meeting its obligations under the 2024 and 2022 bonds and has sufficient funds to do so. “Complicated to deal with the parties involved in the process” In the face of Western sanctions imposed on foreign currency payments by Russia for its military campaign in Ukraine.
According to Russia’s Interfax agency, in March, Severstal, whose main owner Alexei Mordashov is under sanctions by the European Union, reported that Unable to pay Eurobond voucher, which ended up frozen. The company attempted to pay 1% interest (about $12.6 million) to investors as part of a test to see if Western banks would accept the payment. Severstal explained at the time that if it had been accepted, investors would have received the rest of the interest due. However, the payment was Banned by foreign correspondent bank. The company has applied to the US Treasury, UK and the relevant authorities in Luxembourg and Ireland for licenses allowing it to pay interest.
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