Severstal did not pay off the bonds due to sanctions against Mordashov

Severstal failed to pay a coupon on bonds for $12.6 million - the payment agent Citibank rejected the payment due to sanctions against its owner Alexei Mordashov. She promised to find alternative ways

A division of Citibank in New York refused to make a payment to Severstal for $12.6 million on Eurobonds for $800 million maturing in 2024. The company announced this. Citibank acts as the principal paying agent and transfer agent and account bank in respect of the Notes.

Severstal was supposed to redeem this coupon on March 16th. As part of the new currency control measures in RUSSIA, the company received permission from a special commission under the Ministry of Finance to make such a payment. But on February 28, the main owner of the company, Alexei Mordashov, along with other Russian businessmen and politicians, found themselves under EU sanctions in response to the launch of a Russian military special operation in Ukraine.

This is an "extraordinary situation," said Alexander Shevelev, CEO of Severstal. “Unfortunately, our Western financial partner froze the payment initiated by the company. We continue consultations with partners and do our best to ensure that bondholders receive funds in accordance with the terms of the bond issue,” he stressed. Shevelev expressed hope for "cooperation" on the part of the paying agent (Citibank), which, according to him, should act in the interests of bondholders, which include both Russian and foreign residents. “I hope that this injustice will be resolved in the near future, and the rights of bondholders will be realized,” he concluded. RBC sent a request to a Citibank representative.

The company warned a week ago that it had reason to believe that Citibank "may refrain from making a payment" initiated by the company, "given recent developments around the company."

Mordashov said he did not understand why sanctions were imposed against him Politics