EBRD may approve 200-mln-euro loan to Ukrzaliznytsia in May
MOSCOW. March 9 (Interfax) - The European Bank for Reconstruction and Development (EBRD) may issue an emergency support loan of 200 million euros to JSC Ukrzaliznytsia (Ukrainian Railways), Ukraine's national railroad operator, under sovereign guarantees.
The EBRD Board of Directors plans to discuss the proposal at its meeting on May 10, 2023, Ukrainian media said, citing the bank's website.
The loan consists of 100 million euros to provide emergency capex financing to Ukrzaliznytsia and 100 million euros in capital structure support, according to the report.
The loan is also expected to benefit from the donor-funded guarantee to be provided by the G7/EU to cover 50% of exposure, where local commercial financiers cannot provide such risk-sharing mechanism.
The loan will facilitate the expansion of the Ukrainian company's cross-border capacity and improve railway connectivity corridors with EU, address border crossing bottlenecks and help repair the relevant railway sections, the EBRD said.
The financing would allow Ukrzaliznytsia to rehabilitate the key railway corridors on the border with EU and procure the rolling stock thereby helping expand capacity on these rail corridors with the EU.
Fitch Ratings said earlier that as Ukrzaliznytsia expects negative cash flows throughout most of 2023, the company is in need of financing. Fitch added that 400 million euros should be made available to the company, with 199 million euros under existing financing facilities with EBRD and the European Investment Bank, and 200 million euros under the process of acceptance.
Ukrzaliznytsia's outstanding debt stood at 39.5 billion hryvny in last 2022 against 33.5 billion hryvni in 2021, with Eurobonds accounting for 82.8% of the debt, and 94.3% was owed in foreign currencies.
In late January, Ukrzaliznytsia formalized an agreement with holders of two issues of Eurobonds to postpone payments on a total amount of $895 million of Eurobonds for two years. Under the deal, repayments for $594.9 million of Eurobonds at 8.25% interest were moved to July 9, 2026, and those for $300 million of Eurobonds at 7.87% interest were deferred to July 15, 2028.
After the extension of the bonds' maturity, the maximum annual repayment of the debt in 2023-2025 accounts for around 4% of total debt. Major repayments are due in 2026 - 58% of the current total debt (mainly on Eurobonds for $595 million), and after 2027 - 32% (mainly on Eurobonds for $300 million in 2028).