23 Sep 2010 14:52

Naftogaz to get $934 mln capital increase in 2010

KYIV. Sept 23 (Interfax) - The Ukrainian government will boost Naftogaz Ukrainy charter capital by 7.4 billion hryvni ($934.4 million) via purchase of a supplementary issue of shares with an issue of OVGZ bonds.

The Verkhovna Rada approved the measure, which amends the 2010 budget law, on Thursday.

It was reported earlier that the author of the bill, Party of Regions deputy Alexei Zhuravko, proposed in June boosting Naftogaz capital by 10.4 billion hryvni.

At that time the government estimated Naftogaz would lose about 10 billion hryvni in 2010 compared with 45 billion hryvni in 2009. Naftogaz's financial plan for the year projected a deficit of 7.4 billion hryvni.

Last year the government, then led by Yulia Tymoshenko, had submitted a bill to boost Naftogaz capital by 18.6 billion hryvni with an issue of OVGZ, but the Verkhovna Rada rejected the measure.

Later, in July 2009, the government went ahead with the increase under a government resolution, boosting charter capital 18.6 billion hryvni to 24.165 billion hryvni via a supplementary share issue paid with an issue of state bonds. Naftogaz later began selling the bonds and using them to secure repo deals with commercial banks, enabling it to raise cash to purchase Russian gas.

The official exchange rate on September 23 was 7.9192 hryvni/$1.