Siberian Services Company bondholders advised by Mishcon de Reya in London High Court suit

Russian bank Uralsib launched a challenge to the oil services group's roughly USD 100m debt restructuring in London's High Court earlier this year, claiming the approval of the plan secured at a July 2010 bondholder meeting is invalid. Uralsib maintains SSK used affiliates to purchase notes and vote in favour of its restructuring plan.

The case will be precedent-setting, because there is no English case law directly on point, said one of the sources. “The bank will argue that resolutions proposed and passed by the majority noteholders affecting rights in the notes amounted to fraud against the minority noteholders,” a Mishcon de Reya lawyer stated on the law firm’s website.

SSK believes the bondholders’ claims are unfounded, it previously told Debtwire.

The Russian oil field services company’s USD 100m 13.75% CLNs originally matured in April 2010. SSK failed to honour a put option on the notes a year earlier.

The restructuring terms included an extension to 2017 and a reduction of the 13.75% coupon to 4.25%, as reported.

The bondholders believe the company bought back the three-quarters of the issue needed to reach a quorum, using affiliated structures to push through the consent solicitation. Uralsib acted as the creditor group’s informal coordinator, as reported.

SSK was formed in late 1999 as an oil field services arm of Yukos and subsequently bought by Yuri Shafranik, a former Russian energy minister. The company employs about 5,000 workers in seven locations in Russia and one in Uzbekistan, according to its website.