O1 Group Finance, which is an SPV of O1 Group controlled by Russian oligarch Boris #Mints, has defaulted on bond payments again. This time it failed to pay the fourth coupon worth RUB124.65 mln for its RUB5 bn bond issue, the company reports. It explained the non-payment was due to lack of funds in the settlement account. Earlier the company did not succeed with its offer on the bond. Until 19 June, the bond was in technical default, now it’s a true one.
This is the third true default for O1 Group Finance bonds. It has a total of five issues worth RUB87 bn. О1 Group Limited acts as a guarantor for the bonds. In May, it failed to make a coupon payment for RUB14 bn bonds and later – on RUB3 bn bonds. O1 Group Finance announced plans to restructure bonds worth RUB14 bn.
O1 Group Finance’s default affected O1 Properties, another entity controlled by O1 Group. After the former’s technical default on RUB14 bn bonds, Moody’s downgraded O1 Properties from B1 to B3 and left the rating on review for further downgrade. In June, S&P also downgraded O1 Properties citing an increased possibility of control change in the company which would entitle its creditors to accelerated debt repayment. This option is envisaged by terms of its USD350 mln Eurobond issue due in 2021 and by most of the company’s secured loans.
Control over О1 Properties could pass to Cyprus-based Riverstretch Trading & Investments (RT&I), Vedomosti wrote. The latter was engaged by Roman Avdeev’s Rossium to work on the debt restructuring after Credit Bank of Moscow (controlled by Rossium) transferred O1 Group debt worth RUB25 bn to Rossium. The debt is secured by O1 Properties controlling stake, S&P analysts explained. Moody’s added that 62.5 percent of the company’s shares are encumbered, and the next large debt payment is due this June. According to Moody’s, in case O1 Group fails to make the payment, it risks losing control over O1 Properties.
Vedomosti is waiting for comments from O1 Group.