DTEK Oil & Gas receives consent from holders to restructure $425 mln 2026 bond
MOSCOW. May 8 (Interfax) - DTEK Oil & Gas is restructuring debt on its $425 million bond issued via NGD Holdings B.V., which will be paid gradually, over three years to December 31, 2029, with the coupon rate increased from 6.75% to 9.875% per annum, Ukrainian media reported.
"NGD Holdings has received the requisite consents to implement the [restructuring] proposals. Accordingly, all consents are now irrevocable, and the proposals are effective and binding on all noteholders," the issuer said in a stock exchange filing.
The company will pay $2.75 million of consent fees to eligible bond holders on May 14.
Under the restructuring terms proposed by DTEK Oil & Gas on April 9, the increased coupon rate of 9.875% is to accrue from April 30 of this year, while the principal is to be repaid gradually: $27.5 million on April 30 of this year, followed by $27.5 million every six months, on December 31 and June 30, with the remaining balance to be repaid at final maturity on December 31, 2029.
On April 23, the company said it had received consent from holders of 88.66% of the bonds and extended the deadline by seven days. As of April 30, consent had already been received from holders of 88.87% of the bonds. The issuer cautioned that if the 90% threshold was not reached, it might proceed via an alternative route that requires approval either from 50% of bondholders by number or from holders of 75% of the total principal amount of the bonds.
As part of the restructuring, bondholders allowed DTEK Oil & Gas not to publish financial statements until the end of martial law, as regulatory resolutions of the National Energy and Utilities Regulatory Commission limit its ability to publicly disclose certain financial and operational information and data.
In its rationale for the restructuring, DTEK Oil & Gas also referred to the National Bank of Ukraine's moratorium on cross-border transfers, which significantly restricts the company's ability to transfer funds from Ukraine abroad to service its bonds.
DTEK Oil & Gas said that consolidated revenue from gas product sales (including sales of natural gas, gas condensate, and purchased natural gas) decreased from UAH 27.04 billion in 2023 to UAH 19.84 billion in 2024, mainly due to the natural depletion of wells.
"Primarily due to the impact of the NBU moratorium, the issuer expects that it will not be able to redeem the bonds on the maturity date (December 31, 2026)," the company has said.
It has also said its subsidiaries NGD and Kosul hold rights to develop certain deep-horizon project areas that have particularly complex geological and technical characteristics, and therefore will require significantly higher capital investment than more conventional project areas. As a result, these areas have not yet been developed, but in the near future it is proposed to transfer the license rights to one or more new special purpose vehicles (SPVs), which will then seek to develop these areas while sharing project risks, including by attracting one or more joint venture and financial partners.
To implement these projects, DTEK Oil & Gas is seeking creditor consent to enable the establishment of new direct or indirect subsidiaries that will act both as operating companies in relation to the SPVs and as holding companies for one or more SPVs. It is also seeking approval for the sale and transfer to one or more SPVs of subsoil use rights held by NGD and Kosul in respect of two licensed areas at depths exceeding 6,250 meters, followed by the involvement of third parties at fair market value.
Companies within DTEK Oil & Gas in November 2022 acquired at an open auction the rights to develop two gas fields in Poltava region: the Mayorovskaya area for UAH 1.102 billion and the Birkovsko-Zinkovskaya area for UAH 211 million.
According to data from the Frankfurt Stock Exchange, DTEK Oil & Gas bonds are quoted at 92.68% of par. On the day the restructuring proposal was announced, they were quoted at 91% of par.
