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11 June 2015

Sayenko Kharenko advised on the Eurobond restructuring by DTEK, successfully completed under the English law scheme of arrangement

DTEK, Ukraine’s largest energy holding, successfully changed the governing law of its US-governed high yield bonds and became the first Ukrainian-based group to restructure via an English law scheme of arrangement.

Sayenko Kharenko acted as legal counsel to Deutsche Bank, the dealer manager arranging the exchange offer for the outstanding USD 200 million Eurobonds due 28 April 2015 issued by DTEK, Ukraine’s leading energy holding.

Concurrently with the exchange offer DTEK applied to the English court to sanction the English scheme of arrangement. This was aimed at allowing DTEK to acquire the outstanding 2015 notes on the terms of the exchange offer. The exchange offer was also coupled with consent solicitation to amend the existing Eurobonds documentation for the purposes of facilitating the scheme under English law.

Based on the results of the tender, DTEK received sufficient consents to amend the Eurobonds documentation and elected to proceed with the scheme of arrangement as envisaged in the tender documentation. By the ruling of the English court the outstanding 2015 notes were successfully restructured on the terms of the exchange offer (including exchange of the outstanding 2015 notes for 20 per cent cash consideration of their par value and the new notes for 80 per cent of such par value). The new notes due 2018 will bear interest at a rate of 10.375 per annum.

This transaction is the first ever restructuring of the high-yield notes by the Ukrainian issuer using the English law scheme of arrangement and gives incredibly useful precedent to US governed HY issuers.

Sayenko Kharenko’s team working on the exchange offer transaction included senior associate Igor Lozenko, associates Taras Shyb and Marta Lozenko and was led by partner Nazar Chernyavsky.



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