VK warns bondholders about risk of non-execution of obligations

MOSCOW, Mar 15 (PRIME) -- Russian Internet company VK has warned that if the majority of its bondholders on the London Stock Exchange ask for an early redemption, it may not be able to fulfill its obligations, the company said on Tuesday in a statement.

“On March 3, 2022, trading of the VK’s global depositary receipts (GDRs) on the London Stock Exchange (LSE) was suspended by the exchange. It is currently unknown when trading in the GDRs will resume,” VK said.

“Under the terms of the company’s U.S. $400 million 1.625% senior unsecured convertible bonds due 2025, a de-listing event occurs if, among other things, trading of the GDRs on the LSE Main Market is suspended for a period of 10 consecutive dealing days or more (the cut-off date falling in our case on Wednesday, March 16, 2022 inclusive).”

A de-listing event would trigger the redemption rights, and VK estimated that it had cash and cash equivalents of about $190 million as of March 9 – $140 million in foreign currency, including around $80 million in foreign currency outside Russia to support working capital of VK’s international businesses.

“If the company were unable to successfully negotiate with the bondholders, and fails to pay respective amount of principal in respect of the bonds within three days of the due date or fails with respect to the payment of interest for a period of 14 days, an event of default under the terms and conditions of the Bonds would occur,” VK said.

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