DTEK Renewables may buy back up to 20 mln euros of 2024 notes

MOSCOW. Jan 27 (Interfax) - Cyprus-registered Ornex Limited, a subsidiary of DTEK Renewables, which is part of Ukraine's DTEK holding, has offered to buy up to 20 million euros of 2024 notes issued by the parent company, Ukrainian media reported, citing a DTEK Renewables stock exchange filing.

Ornex has announced a tender offer.

"The purpose of the offer is to provide the group (DTEK Renewables) with the opportunity to optimize its capital structure by reducing the share of borrowed funds and its leverage," the company said.

The tender offer closes on February 10, with the results scheduled on February 13 and settlement on or around February 24. The Bank of New York Mellon is acting as agent for the deal.

Ornex Limited is ready to consider requests to purchase bonds at up to their face value of 1,000 euros. In the future, the company may, at its discretion and at any time, decide to cancel and/or sell the repurchased bonds.

Ornex Limited made a similar offer on November 22 last year, but then the buyback price was markedly lower at no more than 30% of the face value. As a result of the tender, the company bought back bonds for a total of 2.583 million euros at 30% of the face value. Notes with a total face value of 8.6 million euros were purchased from a total issue volume of 325 million euros.

According to the Frankfurt Stock Exchange data, DTEK Renewables bonds traded at 33.8%-34.8% on Friday. They fell sharply in price, to 18.85%, the day the previous buyback was announced, but recovered to around 35% after the buyback was completed.

The new tender announcement says DTEK Renewables cut power generation approximately 70% between March and December 2022 compared to the same period in 2021, from 1,739 MWh to 521 MWh.

The company recalled that on February 24, 2022, system operator Ukrenergo instructed all Ukrainian renewable energy producers to halt generation to ensure the stability and balance of the Ukrainian energy sector. The restrictions were lifted on March 2, but only the group's solar power plants were able to restart.

"The group's wind power assets, approximately 50% of its total generating capacity, are currently out of action due to damage to the local power grid [...]. In addition, the group's wind farms are located in territory that is currently not controlled by the Ukrainian government," the notice says.

In addition, the group did not receive full payment for electricity supplied by it to Guaranteed Buyer - GarPok, a Ukrainian wholesale electricity market participant - in 2021 and 2022. The level of payments was 88% for February 2022, between 17% and 33% for March-July, 50% for August, 68% for September, 75% for October, 93% for November, 84% for December 2022 and 99% for the first 20 days of January 2023.

GarPok's total debt to DTEK Renewables as of January 1, 2023 reached 32.4 million euros, of which 2.8 million euros date back to 2021 and 29.6 million euros to 2022.