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Severstal to apply for special licence after Eurobond coupon payment frozen -Breaking

by Mike Robinson

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© Reuters. FILE PHOTO A sign bearing the logo of Russian steelmaker Severstal can be seen at its plant in Cherepovets on October 22, 2018. Picture taken October 22, 2018. REUTERS/Polina Ivanova

(Reuters] – Russian steelmaker Severstal stated Wednesday that it plans to apply for a license in order to receive a Eurobond coupon from Citibank.

Severstal’s main shareholder Alexey Murdashov was put under European Union and British sanctions in response to Ukraine’s crisis. Since last week, Severstal has struggled to pay its Eurobond coupon payments.

Severstal, as an individual, is not under any sanctions. Mordashov in the United States is also not affected by sanctions.

Citibank didn’t process the payment Severstal made last week for the coupon on the 2024 loan participation note (LPN). The grace period ended on Wednesday. Severstal stated in a statement.

Citibank advised Severstal to ask the U.S. Treasury Department’s Office of Foreign Assets Control to grant it a licence to make the payment. This was a source that spoke to Reuters under condition of anonymity.

The source said that Severstal intends to apply for the license very soon.

Citibank refused to comment. Severstal refused to comment on OFAC.

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