MOSCOW – Russia’s Sibir airline has agreed with the holders of 40 percent of an overdue bond to buy back 20 percent of the paper and pay back the rest over the next two years, the airline and its restructuring adviser said.
“Sibir continues its dialogue with the remaining bondholders. With the majority, negotiations are at the stage of agreeing documentation. The company hopes to complete the process in the coming days,” Sibir said.
The airline failed to redeem a 2.3 billion rouble bond in early February.
The airline will spend 197 million roubles on the buyback, and pay a 5.7 percent coupon to holders of 985 million roubles worth of its bonds, Oleg Gordienko, head of debt capital markets at Raiffeisen Bank in Moscow, the bank’s restructuring agent, said.
“It was paid out of operating income,” Gordienko said.
The remainder will be paid in equal instalments in August 2009 and 2010, he added.
Sibir is the third Russian company to restructure its debt to bondholders. Developers PIK and Mirax have already agreed a delayed payment schedule with creditors. But high-profile restructuring negotiations continue around indebted billionaire Oleg Deripaska’s aluminium giant RUSAL, which owes creditors $14 billion.