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Share Capital and IR

Share capital

CompanyHolding Company Metalloinvest
Authorised capitalRUB 3,745,853,000
Number of shares74,917,060,000 shares
Type of sharesOrdinary registered uncertificated shares
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In 2016, 100% of Holding Company Metalloinvest’s shares were consolidated in the Russian company USM Metalloinvest, part of the USM Holdings Limited holding company, in order to streamline the Company’s ownership structure.

Following a series of transactions within one group of entities, USM Holdings Limited (which held a 22.1% stake), USM Investments Limited (4.5%), Lebedinsky GOK (15.96%) and OEMK (3.19%) reduced their interests in Holding Company Metalloinvest to 0%.

The consolidation of 100% of Holding Company Metalloinvest on the books of USM Metalloinvest completed the process of transferring the Company’s shares to the Russian jurisdiction, which started in 2014.

Credit Ratings

Cooperation with rating agencies is an integral part of the Company’s work to increase its investment appeal. Metalloinvest has received credit ratings from international rating agencies since July 2010.

The advantages of the Company’s vertically integrated business model, some of the lowest production costs on the market, together with reasonable liquidity levels helped Metalloinvest to maintain its ratings in 2016.

In 2016, such agencies as Standard & Poor’s, Fitch, and Moody’s upheld their “BB” / “Ba2” long-term corporate credit ratings of the Company. In addition, Metalloinvest’s rating by the Chinese agency Dagong was affirmed at “BBB +”.

Credit rating changes

Credit rating changes Credit rating changesEnlarge

Events after the reporting date

On 20 February 2017, S&P revised the outlook for Metalloinvest’s long-term rating from negative to stable, affirming its “BB” rating.

According to the report, the change in the outlook to stable was linked to the improvement of iron ore prices, and the measures taken by the management to reduce its debt levels, while maintaining higher profitability than the industry average.

S&P continues to believe that the Company has strong competitive positions in the iron ore markets, due to low production costs, unique iron ore resources, a diversified customer base, premiums for high added value products (pellets, HBI / DRI) and the advantages resulting from its vertical integration.

On 12 April 2017, the Fitch Ratings agency confirmed Metalloinvest’s long-term default rating at BB with a stable outlook.

According to a release published by Fitch, Metalloinvest demonstrated financial stability during the period of price volatility in global iron ore and steel product markets, and has consistently worked on debt reduction over the past four years.

In addition, Metalloinvest holds leading positions in terms of production costs among global producers, which helps the Company to generate positive free cash flow throughout the entire industry cycle.

Investor relations

Metalloinvest continuously enhances its public disclosure and interaction with the investment community in a bid to comply with international best practices of disclosure. At present, the Company discloses information on its financial and operating performance, social and other activities in a level of detail and within the timeframes common for public companies. All materials in Russian and English are published in the Investors section of the corporate website.

Metalloinvest participates in international conferences organised by investment banks and holds its Investor Day annually in Moscow, continuously expanding its base of existing and potential investors. Many investors and analysts are invited to visit the Company’s production assets. In 2016, Metalloinvest took part in the following six domestic and international investment conferences and forums:

  • XIV Russian Bond Congress (St Petersburg, Russia)
  • Sberbank CIB’s Metals & Mining and Fertilizer Conference (Moscow, Russia)
  • VTB Capital’s Russia Calling Investment Forum (Moscow, Russia)
  • J.P. Morgan EM Corporate Credit Conference (London, UK)
  • Societe Generale 2016 CEEMEA Conference (London, UK)
  • Bonds, Loans & Derivatives Russia & CIS (Moscow, Russia)

Site-visit

In May 2016, a site visit to Lebedinsky GOK and OEMK was organised for representatives of eleven banks to see the Company’s main production facilities, become better acquainted with its business operations and assess the quality of the assets financed by the banks.

Analyst reviews

In general, the Company’s leverage is high, but refinancing risks are, in our opinion, low. In July, the Company redeemed Metalloinvest16 Eurobond with a face value of USD 750 million and repaid early a part of its USD 600 million pre-export financing facility, having resolved the issue of debt refinancing until the end of 2017. The positive factor was the mitigation of refinancing risks: following the offering of RUB-denominated bonds for a total of RUB 20 billion (around USD 300 million), and raising long-term PXF (2 tranches for 5 and 7 years) for USD 400 million, as well as using previously accumulated cash (USD 824 million), the Company redeemed Metalloinvest16 Eurobond and refinanced almost all of its debt maturing by 2018

Promsvyazbank,
PSB Research

Recognition of a high communication level

Metalloinvest projects in the field of investor relations and corporate communications were highly appreciated by the expert community in 2016.

In 2016, the Company’s annual report was named among the winners of the annual reports contest held by Moscow Exchange and RCB Publishing House, and received awards at the following US contests: the LACP Spotlight Awards Global Communications Competition; the Impact Awards Corporate Reputation Competition; the iNOVA Awards; the Galaxy Awards; and the MarCom Awards.

The Company’s corporate website and online projects also received federal and international awards, and were also recognized by competition juries, including the Runet Award 2016; Golden Site 2016; Best Internet Project 2016 Among Metallurgical and Metal Trading Companies in Russia and CIS Countries (Russia); and the MarCom Awards.

Metalloinvest’s video and multimedia projects were acclaimed at a variety of contests and received multiple awards, including the Videographer Awards 2016 (USA); the Moscow International Corporate Videos Festival (MMFKV2016); Metal Vision 2016; Best Corporate Video 2016 (MMFKV2016); and the MarCom Awards 2016 (USA).

Debt

In 2016, Metalloinvest’s debt repayment schedule was considerably improved.

Debt repayment schedule, USD billion

Debt repayment schedule, USD billion Debt repayment schedule, USD billionEnlarge

2016 transactions

Redemption of the debut Eurobond issue

Metalloinvest redeemed its debut USD 750 million Eurobond issue, placed on the London Stock Exchange in 2011 with a maturity of five years and a coupon rate of 6.5% per annum. The redemption of the debut Eurobond issue and coupon payments were executed in full, in accordance with the terms of the prospectus.

Partial early repayment of pre-export finance facilities

As part of the optimisation of its loan portfolio repayment schedule, Metalloinvest made a 600 USD million partial early repayment of pre-export finance facilities initially due in 2016–2018.

Placement of BO-02 and BO-08 series exchange bonds for a total amount of RUB 15 billion

In March 2016, Metalloinvest issued BO-02 and BO-08 series exchange bonds for a total amount of RUB 15 billion. The bonds have a tenor of 10 years and a coupon rate of 10.95%, with a put option available to holders in 5 years.

Placement of BO-07 series exchange bonds for a total amount of RUB 5 billion

In February 2016, Metalloinvest issued BO-07 series exchange bonds for a total amount of RUB 5 billion. The bonds have a maturity period of 10 years and a coupon rate of 11.90%, with a call option available to the Company in 7 years.

New PXF deal for USD 400 million

As part of its liquidity expansion, the Company signed a longterm pre-export finance facility (PXF) agreement with a club of international banks for USD 400 million. The facility can be increased to a maximum of USD 450 million. According to the terms of the agreement, the new PXF is divided into two tranches: USD 150 million five-year tranche with a three-year grace period and USD 250 million seven-year tranche with a five-year grace period. Coordinators and Mandate Lead Arrangers are UniCredit Bank Austria AG and Sberbank. The proceeds will be allocated to optimising the Company’s debt repayment schedule.

Events after the reporting date

Agreement on terms of new PXF deal of USD 1.05 billion

On 19 April 2017, the Company agreed on the principal terms of a USD 1.05 billion pre-export finance facility with a syndicate of banks, with an option to draw an additional USD 450 million (“PXF-2017”).

The main purpose of this facility is to refinance existing pre-export finance facilities on improved terms and extend their maturity.

Increase in credit line limit to USD 200 million

On 27 April 2017, Metalloinvest signed an additional loan agreement with ING BANK (EURASIA).

According to the terms of the agreement, the bank increased the limit of the two-year committed revolving credit line from USD 150 million to USD 200 million.

The increase of the credit line provides the Company with additional committed liquidity sources.