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Integra brochure
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December 07, 2009

Integra maintained its investors

RBC Daily newspaper
Galina Starinskaya

About 90% of Integra ruble denominated bonds holders agreed not to submit their bonds for repayment thus allowing the company to reduce by almost half its outstanding debt of US$184 million to EBRD. Analysts believe that converting hard currency debts into ruble denominated ones will lower Integra’s financial risks.

Integra announced that on December 3, 2009 it fulfilled its obligations of early redemption of Integra Finance second ruble bond issue. Within the offer, the company repaid 12% of the bond issue for the total value of RUR361 million. To meet its overall liabilities, Integra had accumulated RUR3 billion and therefore now some RUR2.7 billion (US$92 million) will be converted to US$ and directed to partial prepayment of the EBRD facility which currently stands at US$184 million, Integra press release specified.

A month earlier, Integra offered the Integra Finance second ruble bond issue holders to accept an option of not submitting their bonds for repayment, with the company resources being used to prepay the EBRD loan instead. Under the option, the extended bonds would be granted a 16.75% interest instead of the initial 10.7%.

EBRD US$250 million loan was extended to Integra Group this February and envisaged several tranches. EBRD provided US$75 million while US$175 million was co-financed by a syndicate of commercial lenders, including BNP Paribas, ING, VTB Deutschland, Royal Bank of Scotland, Alfa Bank, Commerzbank, Morgan Stanley and Aljba Alliance. In July EBRD agreed not to require compliance by the company with certain debt covenants and granted the loan agreement covenants waiver until the year end. In September, the oilfield service provider announced an additional issue of 1.9 million ordinary shares to be distributed as 38 million Global Depositary Receipts. The stocks so issued accounted for 26.5% of the company share capital and generated US$95 million, of which some 70% were initially intended for the EBRD facility repayment.

Stanislav Bozhenko, URALSIB Capital bond market expert, views the success of the company in retaining stocks in circulation, as a positive sign. “Substitution of hard currency debt with the debt in national currency means lower sensitivity to financial risks as company proceeds are almost entirely in rubles,” he says adding that the market was also attracted by the more favourable terms of the securities prorogation such as a higher coupon rate and more reliable underwriters.