Sanctioned Russian state shipowner Sovcomflot (SCF Group) continues to chip away at bond maturities originally sold outside Russia.
The tanker and LNG carrier owner has been hit by an inability to pay coupons on two Irish issues worth $928m after its payment agent refused to handle its money after the invasion of Ukraine.
Sovcomflot has now revealed the agent is Citibank.
The owner has been exchanging eurobonds for Russian-registered notes.
The company said its $498m 2023 series matured on 16 June.
It had swapped $377m of this amount in April and made further direct settlements in Russia in June to the amount of $70m.
This leaves $51m of international bonds outstanding.
“Because of sanctions restrictions, the paying agent Citibank and international central securities depositories refuse to accept any cash assets from SCF Group to be further distributed to bondholders,” Sovcomflot said.
The owner has applied to Irish and UK regulators to obtain the confirmations needed to make the remaining payments to bondholders.
It expects to be in a position to make the payments “with due cooperation of the paying agent Citibank after such confirmations are issued by the foreign regulators and relevant sanctions concerns are addressed,” the company added.
‘Trustworthy borrower’
A statement posted on its website continued: “Sovcomflot is a responsible and trustworthy borrower and has financial resources necessary to meet its obligations under the eurobonds. The company will keep the bondholders and other stakeholders updated on the status of work to resume the payments.”
The owner managed to replace $318m of its 2028 tranche in October.
The 2028 coupon remains at 3.85% in Russia, while the 2023 bond paid 5.375%.
The company has told investors there are no plans for an early redemption of the 2028 series.
Sovcomflot is known to have missed two interest payments on its two issues in 2022.
The missed coupon in April was worth $8.28m on the 2028 series; the missed June payment was not specified.
The Irish notes were delisted by the Irish Stock Exchange on 12 April 2022, which Sovcomflot said was done “without proper notification”.
