Naftogaz plans to restructure debt early next year

20 December 2022, 07:54 PM
Oleksiy Chernyshov, Naftogaz CEO (Photo:Press service of Naftogaz of Ukraine)

Oleksiy Chernyshov, Naftogaz CEO (Photo:Press service of Naftogaz of Ukraine)

Ukrainian national fossil fuel company Naftogaz plans to restructure its debt at the beginning of 2023, head of the company Oleksiy Chernyshov said in an interview with Forbes Ukraine on Dec. 20.

Following his appointment to Naftogaz head, Chernyshov concluded an agreement with the Lazard company, which is assisting in restructing two of Naftogaz’ Eurobond issues, covering issues of $350 million in 2022 and $500 million in 2026.

“I expect that at the beginning of next year we will reach an agreement with the owners of the bonds on restructuring,” the head of Naftogaz said.

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Naftogaz has already reached an agreement on restructuring for the 2024 release, Chernyshov added.

Notably, the appointment of a supervisory board will help the company attract external financing, and may be in place by the end of January 2023.

Earlier, the Cabinet of Ministers agreed to Naftogaz’ cooperation with the French financial advisory firm Lazard Frères SAS to restructure the company’s Eurobond obligations.

At the end of August, the owners of Naftogaz of Ukraine’s Eurobonds-2024 issue ap-proved a repeated proposal to postpone their payments. The quorum for the 2024 issue was 56.61% of the total number of participants, and the company’s proposal for a postponement was supported by 77.24% of the votes, largely due to the EBRD being one of the owners.

Now the company can pay off the debt of EUR 600 million ($638 million) not in 2024, but in 2026, and it will start paying interest on it in 2024. The amount of interest deferred during the years 2022-2024 will be EUR 90 million ($96 million) (EUR45 million per year, payable in July each year).

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