Ukrainian energy minister says Naftogaz won't default
KYIV. Sept 25 (Interfax) - Ukrainian national oil and gas company Naftogaz Ukrainy will not default as a result of not paying debt on Eurobonds, Ukrainian Fuel and Energy Minister Yuriy Prodan said at a press conference in Kyiv on Friday.
"The situation is calm. There won't be any default," he said.
"Naftogaz has entered the market with restructuring proposals. Almost all the necessary negotiations have been held with creditors and with the largest Eurobond owners. These owners were presented with very serious and reasoned proposals. We expect that when [Naftogaz] draws up proposals in 20 days, all of Naftogaz's debt will be restructured appropriately," he said.
Bohdan Sokolovsky, the president's commissioner for international energy security, said "the debt restructuring terms are acceptable, in my view. I very much hope that they will be accepted by the creditors and there is a high likelihood of this."
"I am an optimist, therefore I think the restructuring will take place," he said, noting that the most complicated aspect of the talks has been "influences from outside Ukraine."
Naftogaz on September 24 offered to exchange $500-million in Eurobonds maturing on September 30, 2009 for new bonds guaranteed by the state and maturing in 2014. The new bonds would have a coupon rate of 9.5% annually compared with 8.125% on the existing issue.
One condition Naftogaz Ukrainy plans for the exchange is that holders who accept the exchange before October 8 would receive new bonds equal to 100% of their holdings. In the second phase, until October 15, holders would receive 95%.
The Eurobond holders are scheduled to meet in London on October 19, 2009.
Analysts surveyed by Interfax said Naftogaz is unlikely to conclude its debt restructuring on time and could default.