1 Apr 2022 17:55
THIS ANNOUNCEMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.
1 April 2022
DTEK FINANCE PLC ANNOUNCES A CONSENT SOLICITATION
DTEK FINANCE PLC
(a company organized under the laws of England and Wales with company number 8422508, having its registered office at 5th Floor, 25 Park Lane, London, W1K 1RA, United Kingdom)
Solicitation of Consents
under the indenture dated as of 17 May 2021 in relation to the 7.0/7.5% Senior Secured PIK Toggle Notes due 2027
issued by DTEK Finance plc
(ISIN XS2342930521) (the "Notes")
DTEK Finance plc (the "Company") today announces a consent solicitation (the "Consent Solicitation") to seek the consent of holders (the "Holders") of the outstanding Notes to certain proposed Waivers (as defined below) (such solicitation, as may be amended from time to time, the "Consent Solicitation").
The Consent Solicitation is being made on the terms, and subject to the conditions, contained in the consent solicitation memorandum dated 1 April 2022 (the "Consent Solicitation Memorandum"). Capitalized terms used but not defined in this announcement have the same meaning ascribed to them in the Consent Solicitation Memorandum. Copies of the Consent Solicitation Memorandum can be obtained (subject to eligibility) via the following website: https://energo.dtek.com/en/ir/bonds-reporting/.
Background to the Waivers
On 24 February 2022, Russian forces commenced a military operation across Ukraine, in response to which the Government of Ukraine declared martial law and the National Bank of Ukraine imposed a moratorium on cross-border payments. On 28 February 2022, the Chamber of Commerce and Industry of Ukraine confirmed that the ongoing hostilities had resulted in the occurrence of a force majeure situation in Ukraine.
As a result, the DTEK Energy B.V. group (the "Group") has experienced a number of significant challenges and disruptions, including, but not limited to (i) lower domestic demand for electricity, (ii) lower domestic pricing for electricity, (iii) the cessation of all electricity exports until 28 March 2022, when exports resumed to Poland (only) in an amount of only up to 200 MW per day, (iv) significantly reduced payment collections, (v) an increase in critical repairs and mandatory fixed costs as a result of damage sustained, and (vi) shortages of personnel and logistical support. In particular:
· on 28 February 2022, the price fixed for the day ahead market was set at UAH 2,224 per MWh, and subsequently the price for electricity in the bilateral market decreased significantly to between UAH 1,800 to UAH 2,000 per MWh;
· on 25 February 2022, the Group lost control of the Lukhanskaya thermal power plant ("TPP");
· operations at Zaporiz'ka TPP were reduced significantly as coal stock could not be delivered to it due to damage to and disruptions affecting the connecting railway infrastructure; only 1 unit at the TPP is currently operational;
· during March 2022, the Group was only able to operate on average between 9 and 13 units of its TPPs, with a total capacity of only approximately 1,500 MW, and, accordingly, its electricity production fell by approximately 30% compared to March 2021; and
· the Group recorded negative operating cash flow for March 2022, and expects to record negative operating cash flow at least during Q2 2022.
Further, given the extent of the disruptions to the Group's business and operating environment, the preparation of the Group's audited consolidated financial statements for the year ended 31 December 2021 may be delayed because the Group's auditors require additional time to analyse prevailing conditions in Ukraine and their impact on the Group.
The Interest Payment Proposals
In response to such adverse conditions, and in an effort to preserve liquidity in order that the Group is able to maintain and protect its assets, operations and employees, subject to the Waivers becoming effective, the Company will:
· pay the interest due under the Notes on 31 March 2022 (the "March Interest Coupon") as follows: promptly following the date on which the Waivers become effective (such date of payment, the "March Interest Coupon Payment Date"), the Company shall pay (i) 3.5% interest in the form of Cash Interest (as defined in the Indenture), (ii) 4% interest in the form of PIK Interest (as defined in the Indenture), and (iii) interest on such overdue interest to the March Interest Coupon Payment Date calculated at a rate of 8.5% per annum in the form of PIK Interest (the "Default Interest"); and
· pay the interest due under the Notes on 30 June 2022 as follows: on 30 June 2022 (the "June Interest Coupon Payment Date" and, together with the March Interest Coupon Payment Date, the "Interest Coupon Payment Dates") the Company shall pay (i) 3.5% interest in the form of Cash Interest, and (ii) 4% interest in the form of PIK Interest,
and no later than 3 Business Days prior to each Interest Coupon Payment Date the Company will deliver to the Trustee and the Paying Agent a notice setting out (i) the total amount of interest to be paid; and (ii) the amount of such interest to be paid in the form of PIK Interest, in each case, on such Interest Coupon Payment Date (each, a "PIK Notice"), and the PIK elections contained in each PIK Notice shall have been approved by a Qualified Resolution, (all such payments and other actions together, the "Interest Payment Proposals").
The Waivers
In order to implement the Interest Payment Proposals, the Company is seeking by means of the Consent Solicitation, Consents from the Holders to:
1. waive any Default that may otherwise occur under paragraph 3 of the Notes as a result of the PIK Notices being delivered by the Company to the Trustee and the Paying Agent less than 20 Business Days prior to the commencement of the interest periods ending on 31 March 2022 and 30 June 2022 (respectively);
2. waive any Default that may otherwise occur under paragraph 3 of the Notes as a result of PIK Interest being paid in consecutive quarters;
3. waive any Default that may otherwise occur under Section 2.11 of the Indenture as a result of any failure to provide or set any notice, record date or payment date specified therein in respect of the payment of the Default Interest, subject to and conditional upon the payment of the Default Interest and the delivery of the relevant PIK Notice in accordance with the Interest Payment Proposals; and
4. waive any Default that may otherwise occur under Section 4.03(b) of the Indenture and any Event of Default that may otherwise occur under Section 6.01(c)(ii) of the Indenture, in each case, as a result of the disclosure in the Parent Guarantor Compliance Certificate to be delivered to the Trustee in respect of Q1 2022 of the payment of the March Interest Coupon on the March Interest Coupon Payment Date (i.e. after 31 March 2022),
and in addition,
5. waive any Default that may otherwise occur under Section 4.16(a) of the Indenture and any Event of Default that may otherwise occur under Section 6.01(c)(ii) of the Indenture, in each case, as a result of any failure to deliver to the Trustee an annual report in respect of the fiscal period ending on 31 December 2021, provided that, such waiver shall terminate on 30 June 2022 if an annual report in the form required under Section 4.16(a) of the Indenture has not been delivered to the Trustee on or prior to such date,
paragraphs 1 - 5 together, the "Waivers", as further described in the Consent Solicitation Memorandum.
Adoption of the Waivers requires the consent of Holders of at least a majority in principal aggregate amount of the outstanding Notes (the "Requisite Consents").
Indicative Timetable for the Consent Solicitation
Holders should take note of the times and dates set out below in connection with the Consent Solicitation. The times and dates are indicative only and are subject to change in accordance with the terms of the Consent Solicitation. Accordingly, the actual timetable may differ from the expected timetable set out below.
Date | Timing | Event |
Commencement Date | 1 April 2022 | Announcement of the Consent Solicitation subject to the terms and conditions set forth in the Consent Solicitation Memorandum. The Consent Solicitation Memorandum is available from the Information and Tabulation Agent.
|
Consent Expiration Time...............
| 4:00 p.m. London time, on 8 April 2022, unless amended by the Company in its sole discretion | The last date and time for Holders to validly deliver their Consents.
|
Effective Time................................. | The time and date of (i) receipt of the Requisite Consents and (ii) the delivery by Information and Tabulation Agent of a certification to the Trustee confirming that the Requisite Consents have been received and not validly revoked as of such time. | The Information and Tabulation Agent will certify that the Requisite Consents have been received and not validly revoked as of such time. For the avoidance of doubt, the Effective Time may fall before, on or after the Consent Expiration Time. The Waivers will become effective from the Effective Time.
|
Announcement of the Consent Solicitation results........................... | The next business day following the Effective Time or the Consent Expiration Time, as applicable | If the Requisite Consents are received, the Company will make a public announcement of the Effective Time at, or prior to 9:00 a.m. London time, on the next business day after the Effective Time. If the Requisite Consents are not received, the Company will make a public announcement thereof on the next business day after the Consent Expiration Time. |
The Company expressly reserves the right, in its sole discretion, subject to the requirements of applicable law, (i) to terminate, withdraw or re-open the Consent Solicitation, (ii) to amend the Consent Expiration Time, and (iii) to amend the terms of the Consent Solicitation, subject to any obligation under applicable law to amend the period of time the Consent Solicitation remains open. Details of such extension, re-opening, termination or amendment will be announced as provided in this Consent Solicitation Memorandum as soon as reasonably practicable after the relevant decision is made.
Holders are advised to check with the custodian, securities broker, the Clearing Systems or other intermediary through which they hold their Notes whether such intermediary applies different deadlines for any of the events specified above, and then to adhere to such deadlines if such deadlines are prior to the deadlines set out above. All of the above dates are subject to earlier deadlines that will be set by the custodian, the Clearing Systems or any intermediary.
Further Information
A complete description of the procedures in relation to the terms of the Consent Solicitation are set out in the Consent Solicitation Memorandum.
Holders are advised to read the Consent Solicitation Memorandum carefully for full details and information on the procedures for participating in the Consent Solicitation. GLAS Specialist Services Limited is acting as Information and Tabulation Agent.
Requests for all information in relation to the Consent Solicitation should be directed to:
The Information and Tabulation Agent
GLAS Specialist Services Limited55 Ludgate Hill, Level 1, West, London,England, EC4M 7JW
Email: lm@glas.agency
Telephone: +44 (0)20 3597 2940
Copies of the Consent Solicitation Memorandum are available to eligible persons upon request from the Information and Tabulation Agent free of charge.
This announcement has been prepared by the Issuer exclusively for information purposes. It does not constitute or include any advice or recommendation by the Issuer (or any other person) regarding the securities of the Issuer or as to the merits of any transaction or the making of any investment decision. It does not constitute or include any confirmation or commitment by the Issuer (or any other person) regarding the present or future value of the business of the Issuer, its securities, its affiliates or any of the Issuer's or their assets.
Neither this announcement nor the Consent Solicitation Memorandum constitutes or forms part of, and should not be construed as, an offer for sale or subscription of, or a solicitation of any offer to buy or subscribe for, any securities of the Issuer or any other entity in any jurisdiction.
The distribution of this announcement and the Consent Solicitation Memorandum in certain jurisdictions may be restricted by law. Persons into whose possession this announcement or the Consent Solicitation Memorandum comes are required by the Issuer and the Information and Tabulation Agent to inform themselves about, and to observe, any such restrictions. This announcement and any materials relating to the Consent Solicitation do not constitute, and may not be used in connection with, any form of offer or solicitation in any place where such offers or solicitations are not permitted by law.
This announcement may include "forward-looking" statements within the meaning of applicable securities laws. Any such statements reflect the current views of the Group about further events and performance. No assurances can be given that such events or performance will occur as projected and actual results may differ materially from these projections.
Please address any questions or concerns to:
Oksana Nersesova
+380 44 581 4522
ir@dtek.com