Company name BKM Finance DAC
Headline Write Down Event Notice


RNS Number : 2118T
BKM Finance DAC
10 October 2017
 

Company name             BKM Finance D.A.C.

Headline                       Write Down Event Notice

 

COMPANY ANNOUNCEMENT

 

 10 October 2017

BKM Finance D.A.C.

 

For immediate release

U.S.$200,000,000 9.15 per cent. Loan Participation Notes due 2023 (the "Notes") (ISIN: XS0944741833) issued by, but with limited recourse to, BKM Finance  D.A.C. (the "Issuer") for the sole purpose of financing a subordinated loan to Public-Joint Stock Company "Bank Otkritie Financial Corporation" (formerly Public Joint-Stock Company "Khanty-Mansiysk Bank Otkritie") (the "Borrower").

Pursuant to a notice dated 29 September 2017 and a letter dated  6 October 2017 received from  the Borrower the Issuer has received a Write Down (Exchange) Event Notice (the "Notice") for the purposes of the Subordinated Loan Agreement dated 14 June 2013 and as amended and restated with the Amended and Restated Subordinated Loan Agreement dated 27 August 2015 and as further amended by the Deed of Amendment to the Amended and Restated Subordinated Loan Agreement dated 28 January 2016 between the Issuer and the Borrower (the "Subordinated Loan Agreement"). The notice dated 29 September 2017 referred to the write down provisions inconsistently and was amended by the letter dated 6 October 2017 which set out the correct test. Terms not otherwise defined herein shall have the meanings given to them in the Subordinated Loan Agreement.

 

1.         In the Notice, the Borrower notified the Issuer that:

a)       on 26 September 2017 the Base Capital Adequacy Ratio determined by the Borrower pursuant to Instruction No. 139-1 was less than 5.125per cent. for six or more banking days in aggregate during a consecutive 30 banking days period which means that a Write Down (Exchange) Event occurred on 26 September 2017 (the "Write Down (Exchange) Event Date");

b)       the Mandatory Measures Effective Date will occur on 8 November 2017 (the 30th Business Day in Moscow after the date of disclosure of the occurrence of the Write Down (Exchange) Event on the website of the Bank of Russia);

c)       the Borrower has elected not to effect an Exchange pursuant to Clause 8.2 of the Subordinated Loan Agreement.

 

The Central Bank of Russia's press-release regarding the Base Capital Adequacy Ratio decrease can be found at the following link: http://cbr.ru/press/pr/?file=26092017_212920ik2017-09-26T21_22_29.htm

2.         In accordance with Clause 8 of the Subordinated Loan Agreement if a Write Down (Exchange) Event has occurred and is continuing on the Mandatory Measures Effective Date the following consequences arise:

the Borrower's obligations to repay the principal amount of the Loan and to pay penalties for non-performance of obligations thereunder shall be terminated in full or in part (such measure in respect of the principal amount of the Loan being a "Principal Write Down Measure", and in respect of the penalties being a "Penalties Cancellation Measure"), and any unpaid interest under the Loan shall not be paid and shall not accumulate as a result of the full or partial termination of the Borrower's obligations to pay the amount of accrued interest under the Loan (such measure being an "Interest Cancellation Measure").

3.         If a Write Down (Exchange) Event has occurred and is continuing on the Mandatory Measures Effective Date, and the Borrower has not opted to effect the Exchange, the Borrower shall (without the need to procure the consent of the Lender) on the Mandatory Measures Effective Date:

 

a)       firstly, terminate the obligations to pay the Penalties Cancellation Amount for the purposes of the Penalties Cancellation Measure;

b)       secondly, terminate the obligations to pay the Interest Cancellation Amount for the purposes of the Interest Cancellation Measure; and

c)       thirdly, terminate the obligations to repay the principal amount and write down the Principal Write Down Amount for the purposes of the Principal Write Down Measure (if applicable).

4.         If a Write Down (Exchange) Event has occurred as a result of any losses incurred by the Borrower, any Write Down Measures may only be applied by the Borrower after undistributed profit, reserve fund and other sources of the Base Capital have been exhausted to absorb losses of the Borrower.

 

5.         Subject to Clause 8 of the Subordinated Loan Agreement, the Borrower shall determine the Penalties Cancellation Amount, the Interest Cancellation Amount and the Principal Write Down Amount in its sole discretion and shall set out its determination thereof in the Mandatory Measures Notice. The Borrower's determination of the Penalties Cancellation Amount, the Interest Cancellation Amount and the Principal Write Down Amount shall in the absence of fraud or manifest error be binding on all parties.

 

6.         The Borrower shall provide to its shareholders and the Lender (with a copy to the Trustee) no later than twenty Business Days after the Write Down (Exchange) Event Date and in any case prior to the Mandatory Measures Effective Date, the Mandatory Measures Notice.

7.         Pursuant to Clause 6.4 of the Terms and Conditions of the Notes and pursuant to Clause 8 (Mandatory Measures: Exchange and Write Down Measures) of the Subordinated Loan Agreement, if a Write Down (Exchange) Event has occurred and is continuing on the Mandatory Measures Effective Date, the Borrower's obligations to repay principal amount of the Subordinated Loan shall be terminated in full or in part and the Borrower shall on the Mandatory Measures Effective Date terminate the obligations to repay the principal amount and write down the Principal Write Down Amount for the purposes of the Principal Write Down Measure (as all such terms are defined in the Subordinated Loan Agreement). To the extent that, pursuant to Clause 8 (Mandatory Measures: Exchange and Write Down Measures) of the Subordinated Loan Agreement, the principal amount of the Subordinated Loan (together with any interest thereon) is reduced, then the principal amount of each of the Notes will be written down on a pro rata basis, upon such reduction of the Subordinated Loan, without any further payments due on such principal amount of each Note that is written down.

This announcement is released by the Issuer and contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 (MAR), encompassing information relating to the Notes described above. For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is made by the Directors of BKM Finance D.A.C.

 

Given by the Issuer.

 

Enquiries:

 

The Directors

BKM Finance D.A.C.

Pinnacle 2
Eastpoint Business Park
Dublin 3
Ireland

E-mail: corporate.services@db.com

 

 

 

This announcement has been issued through the Companies Announcement Service of

the Irish Stock Exchange.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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