EBRD may block Ukrenergo's access to 141 mln euros due to changes to charter - Ukrainian MP
MOSCOW. June 9 (Interfax) - Changes made by the Ukrainian Energy Ministry to the charter of the Ukrenergo company and a new requirement for a qualified majority of votes to appoint the board's chairman have drawn an acute reaction from the company's creditor, the European Bank for Reconstruction and Development (EBRD), potentially entailing the loss of access to 141 million euros in loans and grants and the need for early repayment of the 533 million euros already received, Ukrainian media quoted member of the Verkhovna Rada's energy committee Maxim Khlapuk as saying.
"The Energy Ministry has pushed Ukrenergo into a real default, not a technical one. The changes introduced by the Energy Ministry to the company's charter in order to enhance its influence over it have already taken a toll on the financial stability of the operator of critical energy infrastructure. A few days ago, the EBRD, referring to the Energy Ministry's order amending the charter, underscored its right to suspend the disbursement of loan funds and demand early repayment of the loan already provided," media outlets quoted Khlapuk as saying on social media.
The MP also published an excerpt from the EBRD's June 6 letter to Ukrenergo and Ukraine's Finance Ministry.
In its letter, the EBRD pointed to Ukrenergo's inability to timely notify the bank of any changes to its charter and to offer an opportunity to comment on them.
Referring to the terms of the loan agreements, the EBRD underscored its right to suspend disbursements and to send appropriate notices demanding early repayment of the loans due to the charter changes.
"This situation threatens Ukrenergo not only with the loss of access to further financing from the EBRD in the amount of 141 million euros (77 million euros of unutilized loan balance and 64 million euros in an expected grant), but also with the need for early repayment of the funds it has already received in the amount of 533 million euros," Khlapuk said.
Furthermore, there are risks for the restructuring of Ukrenergo's debt liabilities to holders of green sustainable development bonds, for which the company planned to raise $430 million on international capital markets under DFC guarantees, he said.
"This debt management operation was initially supposed to be completed in early July, but its success is directly dependent on support from international financial institutions. And, according to the information that I have, the DFC has now suspended any steps related to the green bonds' restructuring," Khlapuk said.
