Naftogaz debt on loans could reach $9-$10 bln by 2010
KYIV. Sept 2 (Interfax) - Naftogaz Ukrainy could see its debt on loans reach 70 billion-80 billion hryvni (about $8.8 billion-$10 billion) by the end of 2009, Bogdan Sokolovsky, the Ukrainian president's representative for international energy security issues, said at a briefing in Kyiv on Wednesday.
"Naftogaz Ukrainy's loan debt will reach 70 billion-80 billion hryvni by the end of the year. This hasn't happened before in the history of independent Ukraine," he said.
Sokolovsky said the debt is the result of unbeneficial contracts with Gazprom as well as the unreformed Ukrainian gas market, for which the government bears responsibility.
"Naftogaz has a chance to reach the verge of bankruptcy," he said.
The company said in a report under International Financial Reporting Standards (IFRS) on Wednesday that debt on loans increased 140% in 2008 to 26.21 billion hryvni ($3.4 billion at 7.7 hryvni/$1 exchange rate at the end of 2008).
Naftogaz has already begun holding talks on the restructuring of some $1.6 billion in debt on Eurobonds and loans from foreign banks and hopes to wrap up the talks before the end of 2009.
According to a report for the first half of 2009, Naftogaz increased debt on long-term loans 15.3% to 13.6 billion hryvni under Ukrainian accounting standard and on short-term loans 6% to 20.76 billion hryvni.
The company had total long-term debt of 20.46 billion hryvni at the end of June and current liabilities of 55.88 billion hryvni.
The official exchange rate on September 2 was 7.98 hryvni/$1.