Annual report 2015

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Annual report 2015

Four success factors



Metalloinvest is committed to the continuous implementation of best international corporate governance practices

Metalloinvest is committed to the continuous implementation of best international corporate governance practices

Share capital and IR

Share capital1

Holding Company Metalloinvest
Authorised capital
RUB 3,745,853,000
Number of shares
Type of shares
Ordinary registered uncertificated shares

Metalloinvest Holding Company is wholly-owned by USM Holdings Limited. Alisher Usmanov is USM’s major beneficiary (48%), and the other major shareholders are Vladimir Skoch (30%) and Farhad Moshiri (10%).

At the end of 2015, there were changes in Holding Company Metalloinvest’s shareholder structure: 23.6% of its shares previously owned by USM Investments Limited were transferred to USM Holdings Limited, the parent company.

In 2015, Metalloinvest Holding Company completed the spin-off of Baikal Mining Company, which holds a development licence for the Udokan copper deposit (over 26 million tonnes of copper). Baikal Mining Company’s shareholders are USM Metalloinvest (54.25%), USM Investments Limited (26.60%), Lebedinsky GOK (15.96%), and OEMK (3.19%).

Share capital structure as at 31 December 2015

Credit ratings

Co-operation 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.

In 2015, agencies such as Standard & Poor’s, Fitch, and Moody’s upheld their “BB”/”Ba2” long-term corporate credit ratings of the Company. Standard & Poor’s was the only one to revise their outlook from stable to negative due to growing uncertainty as a result of a slump in iron ore prices, higher country risk, and limited access of Russian corporations to capital markets. Amid the fall in steel and ore prices, coupled with peer rating downgrades, Metalloinvest managed to maintain its ratings by leveraging its vertically integrated business model, some of the lowest production costs on the market, and adequate liquidity levels. Metalloinvest is strengthening ties with Chinese partners. In November 2015, it became the first Russian non-state-owned company to receive a rating from Dagong2 . China’s Dagong Global Credit Rating Co., Ltd. assigned the Company long-term localand foreign currency issuer default ratings of “BBB+” with a stable outlook. A press release by Dagong’s credit analysts stated that due to the Company’s diversified sources of financing, western sanctions against Russia had not restricted Metalloinvest’s access to external capital markets. According to the agency, the Company’s cash generating capabilities may improve on the back of the gradual recovery of the rouble, product line optimisation and strict cost control. Dagong’s conclusion was that multiple financing sources for debt repayment will allow the Company to meet its obligations towards its creditors in a timely manner.

Credit rating changes

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 operational performance, social and other activities in a level of detail and within the timeframes that are common for public companies.

Metalloinvest participates in international conferences organised by investment banks and arranges investor events, including non-deal road shows and an annual Investor Day 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 2015, Metalloinvest took part in nine domestic and international investment conferences and forums and held meetings with over 200 investors and analysts.

Metalloinvest’s corporate communications projects were recognised by the expert community. In 2015, the Company’s annual report was victorious at the American MarCom Awards 2015 and the LACP 2015 Spotlight Awards Global Communications Competition, and its website won gold at the World’s Best Corporate Websites iNOVA Awards 2015 (USA). The video for the Company’s annual report won at the 2015 Moscow Corporate Video Forum.

Debt capital markets

In 2015, Metalloinvest worked to improve its repayment schedule and optimise its debt portfolio.

Under the March 2015 put option, the Company repurchased the series 01, 05 and 06 rouble bonds at 100% of their par value for RUB 25 billion.

In June 2015, Metalloinvest and an international banking syndicate consisting of Societe Generale, Sumitomo Mitsui Banking Corporation Europe Limited, Bank of Tokyo-Mitsubishi UFJ Ltd., Crédit Agricole Corporate and Investment Bank, UniCredit Bank Austria AG and ING Bank, a Branch of ING-DiBa AG, signed a credit facility agreement (ECA) for up to EUR 267 million to finance foreign equipment purchases for HBI-3 Plant at Lebedinsky GOK. According to the agreement, the facilities will be repaid within 10 years following the commissioning of HBI- 3 Plant. Austrian (OeKB) and British (UKEF) export credit agencies acted as guarantors.

In July 2015, the Company signed an agreement with Rabobank to extend the maturity schedule of its USD 131 million facility from April 2017 to October 2018.

In 2015, we focused on optimising our debt portfolio and maintaining sufficient liquidity. We successfully raised cash on the domestic and international capital markets, and made improvements to our repayment schedule.

Pavel Mitrofanov
Deputy CEO, Chief Financial Officer

In the same month, Metalloinvest and an international banking syndicate comprising Bank of China (Hungary) Close Ltd., ING Bank N.V., Sberbank Europe AG, Societe Generale, UniCredit Bank Austria AG, Deutsche Bank AG (Amsterdam Branch), Intesa Sanpaolo Bank Ireland P.L.C., JSC Nordea Bank, Bank of America Merrill Lynch International Limited, China Construction Bank (Russia) Limited, Credit Suisse AG, SGBT Finance Ireland Limited and Industrial and Commercial Bank of China (Moscow) signed a pre-export financing (PXF) facility agreement for USD 750 million. Pursuant to the agreement, the PXF facility is made up of a USD 600 million 5-year tranche with a 2-year grace period and a USD 150 million 7-year tranche with a 5-year grace period. This money was spent on partial early repayment of the 2014 PXF facility in the amount of USD 515 million, and the rest was used to increase the Company’s liquidity.

In October 2015, the Company issued BO-01 series bonds for a total amount of RUB 10 billion. The bonds have a tenor of 10 years and a coupon rate of 11.85% per annum for the first 12 coupon periods. A call option is available in 4 years, and a put option in 6 years. Gazprombank acted as the arranger and underwriter of the offering.

2016 transactions

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

In March 2016, the Company signed a USD 400 million long-term PXF agreement with a syndicate of international banks with an option to increase the amount up to USD 450 million. As per the agreement, the new PXF facility is made up of a USD 150 million 5-year tranche with a 3-year grace period and a USD 250 million 7-year tranche with a 5-year grace period. UniCredit Bank Austria AG and Sberbank of Russia acted as co-ordinators and mandated lead arrangers of the deal. The money raised through the facility will be spent on optimising the Company’s debt repayment schedule.

In March 2016, Metalloinvest issued BO-02 and BO-08 series 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 in 5 years.

Useful links

Investor Calendar
Site Visits
Analyst Coverage:
More details on the outstanding bonds

1 As at 31 December 2015.

2 Dagong Global Credit Rating Co., Ltd. was founded in 1994 and is China’s largest rating agency. It employs around 600 people and has 36 branches, two of which are located outside of China. Dagong provides information on sovereign and corporate credit risks and is an active contributor to the development of the Asian bond market. At the start of 2015, the agency confirmed Russia’s sovereign rating at “A” with a stable outlook.

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