NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO, OR TO ANY
PERSON LOCATED OR RESIDENT IN, ANY JURISDICTION WHERE IT IS UNLAWFUL
TO RELEASE, PUBLISH OR DISTRIBUTE THIS ANNOUNCEMENT OR RELATED
DOCUMENTS.
THIS
NOTICE IS IMPORTANT AND REQUIRES THE IMMEDIATE ATTENTION OF HOLDERS.
IF HOLDERS ARE IN ANY DOUBT AS TO THE ACTION THEY SHOULD TAKE, THEY
SHOULD SEEK INDEPENDENT ADVICE, INCLUDING AS TO ANY LEGAL, FINANCIAL
OR TAX CONSEQUENCES, IMMEDIATELY FROM THEIR OWN BROKER, BANK MANAGER,
SOLICITOR, ACCOUNTANT OR OTHER INDEPENDENT FINANCIAL, TAX OR LEGAL
ADVISER.
23
September 2022
PJSC
"RUSHYDRO"
(“RusHydro”)
NOTICE
to
the holders of
RUB
20,000,000,000 8.125 per cent. Loan Participation Notes due 2022
issued by, but without recourse to, RusHydro Capital Markets DAC (the
“Issuer”) for the sole purpose of financing the loan under the
Loan Agreement (ISIN: XS1691350455, CFI: DYFXXR)
(the
“Notes”)
NOTICE
IS HEREBY GIVEN that RusHydro
is proposing to make direct payments to the holders of the Notes as
set out below. This proposal is aimed at those Noteholders who hold
their Notes in non-Russian depositaries and clearing systems (the
“Non-Russian
Noteholders”).
Payments to Noteholders who hold their Notes via Russian depository
accounts (the “Russian
Noteholders”)
shall be made separately through Russian depositaries in accordance
with applicable mandatory Russian legislation.
To
make direct payments to the Non-Russian Noteholders, RusHydro is
required to obtain a Government Commission Approval (as defined
below) and use a type D account opened in Russian rubles with a
Russian bank. To apply for the Government Commission Approval and
open a type D account, RusHydro would first need to identify such
Non-Russian Noteholders who are willing to receive payments under the
Notes via a type D account (the “Electing
Noteholders”).
Accordingly, RusHydro hereby asks the Electing Noteholders to
identify themselves and provide certain information about themselves
and the Notes held by them.
For
Non-Russian Noteholders who fail to make an election to receive
payments under the Notes via a type D account as set out herein (the
“Non-Electing
Noteholders”),
RusHydro will be required to transfer the amounts due to them to a
type C account pursuant to the Russian President’s Decree No. 95 of
5 march 2022. By law, monies transferred to a type C account may only
be used for a limited number of purposes (such as the payment of
Russian taxes, etc.) and will not be available for transfer to the
Non-Electing Noteholders’ accounts of other types opened with
Russian banks or outside Russia.
Terms
used but not otherwise defined in this Notice have the meanings given
to them in the trust deed dated 28 September 2017 (the "Trust
Deed")
between the Issuer and BNY Mellon Corporate Trustee Services Limited
as trustee (the "Trustee").
Rationale
From
February 2022 onwards the United States of America, the European
Union, the United Kingdom and other nations have imposed additional
sanctions against the Russian Federation and Russian persons in
connection with events in Ukraine. The sanctions, among other
things, significantly disrupted the existing framework and
infrastructure for servicing, delivery and settlement of securities.
On 24
March 2022, RusHydro duly fulfilled its payment obligations under the
Loan Agreement by transferring funds in the amount of RUB 812,500,000
for subsequent coupon payment. However, the funds duly received by
the Principal Paying Agent were subsequently frozen because of
sanctions introduced by the U.K. Office of Financial Sanctions
Implementation (OFSI) on 24 March 2022 and did not reach the
Noteholders. Any funds that RusHydro may transfer to the Issuer under
the Loan Agreement or to the Principal Paying Agent will presumably
be subject to similar freezing before they reach the Noteholders at
maturity of the Notes.
On 9
May 2022, BNY Mellon Corporate Trustee Services Limited notified the
Issuer and RusHydro of its inability to act as the Trustee in respect
of the Notes. On 9 May 2022, TMF Management (Ireland) Limited
resigned as the share trustee to the Issuer. On 4 July 2022, TMF
Administration Services Limited, an Irish corporate services provider
to the Issuer, unilaterally terminated with immediate effect the
corporate services agreement with the Issuer. As a result, neither
the Issuer, nor the Notes infrastructure established by the Trust
Deed are fully functional at this time and the Noteholders are
unlikely to receive any payments that may be made by RusHydro via
said infrastructure pursuant to the Loan Agreement and the Trust
Deed.
Pursuant
to the Russian President’s Decree No. 430 of 5 July 2022 and
implementing decisions of the Russian Central Bank entities who have
payment obligations in relation to Eurobonds (such as RusHydro in
relation to the Notes) are required to make payments through Russian
depositories to investors who hold such Eurobonds via Russian
depository accounts. Accordingly, in compliance with this mandatory
requirement RusHydro shall pay the Russian Noteholders through
Russian depositaries.
RusHydro
is working on a solution that would allow all the Noteholders,
including the Non-Russian Noteholders, to receive their funds upon
maturity of the Notes. The Russian President’s Decree No. 529 of 8
August 2022 and the Russian Central Bank’s implementing decision
(together the “Type
D Account Regulations”)
allow persons who have payment obligations in relation to Eurobonds
(such as RusHydro in relation to the Notes) to open special type D
accounts in Russian rubles with Russian banks to make payments in
respect of Eurobonds held at non-Russian depositories and clearing
systems.
Pre-Conditions
to direct payment to the Electing Noteholders
Payments
under the Type D Account Regulations are subject to prior approval of
the Russian Government Commission for Control over Foreign
Investments in the Russian Federation (the “Government
Commission”).
RusHydro is proposing to apply for an approval of the Government
Commission of its direct payments to the Electing Noteholders (the
“Government
Commission Approval”)
and to open a type D account in favour of the Electing Noteholders
and to use such account to make payments due to the Electing
Noteholders at maturity of the Notes.
Pursuant
to the Type D Account Regulations, type D accounts are open in favour
of specific recipients. Accordingly, to take advantage of the payment
option allowed by the Type D Account Regulations, RusHydro needs to
identify the Electing Noteholders and receive from them such
information as may be required by (i) the Government Commission to
issue the Government Commission Approval and (ii) a Russian bank (the
“Bank”)
selected by RusHydro to carry out the settlements with the Electing
Noteholders.
The
approval by RusHydro of the relevant funds transfer to an Electing
Noteholder is conditional upon receipt of the originals of the
Election Documents on behalf of such Electing Noteholder as set out
in section “Noteholder
to make a direct payment election”
below.
Risk
factors
The
Type D Account Regulations are new and untested legislation. They are
worded in general terms and give little or no guidance on important
specific questions, including, without limitation, as to (i) the
timing and procedure for obtaining the Government Commission Approval
and (ii) the exact scope of identifying information and documents
that may be required by the Bank to carry out the payments to the
Non-Russian Noteholders. In response to RusHydro’s request for
clarifications, the Russian Central Bank has indicated to RusHydro
that Russian banks have discretion in determining the scope of
identifying information and documents they require to process
payments to investors from type D accounts.
The
implementation of the proposed direct settlement with the Electing
Noteholders involves discretion, and requires consent and
cooperation, of third parties over which RusHydro has no control,
including without limitation the Government Commission and the Bank.
Delays on the part of the Government Commission or its failure to
issue the Government Commission Approval or delays or failure by the
Bank to transfer the payments may result in the direct payment
arrangement not achieving the desired result in full or in part.
Although RusHydro would take reasonable steps to ensure that the
proposed direct settlements are completed and the relevant amounts
are transferred to the Electing Noteholders as soon as reasonably
possible, no assurance can be given that this will be achievable.
Similarly,
given the existing complex international sanctions regimes, no
assurance can be given that the Electing Noteholders’ banks will
accept payments from the Bank and make the transferred funds
available to the respective Electing Noteholders.
Noteholder
to make a direct payment election
To
elect to receive the monies due to a Noteholder at maturity of the
Notes directly from RusHydro in accordance with the Type D Account
Regulations (“Direct
Payment Election”),
an Electing Noteholder should deliver, or arrange to have delivered
on its behalf, to RusHydro scans of the following documents:
(i) proof of holding of the Notes (as set
out below);
(ii) a valid completed and duly executed
Direct Payment Election Notice;
(iii) a duly executed deed of assignment and
waiver; and
(iv) a valid completed and duly executed Notice of
Assignment and Waiver
by no
later than 10:00 a.m. (London time) / 12:00 noon (Moscow time) on 3
October 2022, to the attention of the Corporate Finance Department at
the following email address:
,
.
Acceptable
proof of holding referred to under item (i) above are documents
allowing to clearly identify the end-holder of specific Notes,
including (i) statements of account from Direct Participants (as
defined below), screenshots from Euroclear or Clearstream, Luxembourg
identifying the relevant person as a Direct Participant and
identifying the Notes held by them, along with evidence indicating in
whose favour the Notes are held by the relevant Direct Participant
and (ii) evidence that the Notes are held by a particular end-holder
through an Intermediary or Intermediaries (in each case including the
amount of the Notes held and the names and account numbers of the
relevant end-holders and Intermediary or Intermediaries along the
entire holding chain from the relevant end-Noteholder to the relevant
Direct Participant). A “Direct
Participant”
means a person that is shown in the records of the clearing and
settlement systems of Euroclear or Clearstream, Luxembourg as a
holder of Notes. An “Intermediary”
means a depositary, broker, dealer, commercial bank, trust or asset
management company or other nominee or custodian that holds any
Notes.
Documents
listed under items (ii) through (iv) above shall together be referred
to as the “Election
Documents”. Forms
of the Election Documents are available upon request sent to the
following email address:
.
Originals
of the Election Documents shall be delivered by hand or sent by an
internationally recognized courier service to the following
addresses
PJSC
“RusHydro”
7
Malaya Dmitrovka Street
Moscow
127006
Russian
Federation
Attention:
Corporate Finance Department
or
JSC
«Institute Hydroproject», Branch in the Kyrgyz Republic
Office
1105, Business Centre “Russia”
19
Razzakova Street
Bishkek
720040
Kyrgyz
Republic
Attention:
PJSC “RusHydro” (Corporate Finance Department)
The
approval by RusHydro of the relevant funds transfer to an Electing
Noteholder is conditional on receipt of the Election Documents on
behalf of such Electing Noteholder at the addresses stated above.
RusHydro
reserves the right to request further information and documents from
the Electing Noteholders if such information and documents are
required by the Government Commission or the Bank.
Only
Noteholders who hold the Notes as of 27 September 2022 may submit a
Direct Payment Election Notice.
As
part of proposed direct redemption and settlement arrangements and
subject to the Type D Account Regulations or other applicable laws,
the Electing Noteholders shall be able to select receiving payments
in Russian rubles, United States dollars or other foreign currency.
Any and all currency conversion, exchange, transfer or other bank
fees (including fees charged by any intermediary or correspondent
banks) in connection with the transfer of the relevant funds to the
Electing Noteholders’ accounts shall be borne by the Electing
Noteholders and not RusHydro. The selection of currency other than
Russian rubles or U.S. dollars may be subject to the discretion of,
and special arrangements with, the Bank.
Direct
Payment Election Notice irrevocable
Direct
Payment Election Notices will be irrevocable.
|