DTEK again offers partial buyback of DTEK Energy notes

MOSCOW. March 10 (Interfax) - DTEK Holdings Limited has again offered to buy back notes issued by DTEK Energy maturing in 2027, however, compared to the November offer, the stated maximum amount for the buyback was reduced from $50 million to $30 million, and there is no maximum buyback price, which was 27% of face value in November.

"The management has concluded that under the current unforeseen circumstances [...] and the volatile inflationary macroeconomic environment, it would be preferable and cost-effective for the bondholders and for the group's overall economic performance to conduct additional buybacks through the unmodified Dutch auction mechanism," Ukrainian media reported quoting a DTEK Holdings Limited stock exchange filing.

Applications for participation in the tender are accepted until the evening of March 20, its results are scheduled to be announced on or around March 21, and settlements are scheduled on or around April 11.

DTEK said it had carefully analyzed the current liquidity and compared the short-term operating needs of the group, its current and future receipts on accumulated receivables, further payments on outstanding bonds, multiple risks and restrictions on trading and expenses. It said Ukraine's energy infrastructure had been damaged and disrupted since October 2022, leading to significant damage at a number of generating facilities and regional energy companies.

DTEK also said there were currently restrictions on exports and a National Bank of Ukraine moratorium on the purchase of foreign currency for payments on Eurobonds. "In these circumstances, it is critical that the group continue to actively manage maturities and debt repayments to ensure a more stable capital structure that allows it to protect its assets, operations and employees," it said.

As announced in November 2022, the excess cash allowed the Group to repurchase approximately $154 million in the nominal amount of notes. The concluded repurchase process has also demonstrated that there remained significant unfilled supply from the holders of the notes. On December 16, 2022, the group also completed a repurchase of a further $80 million in the aggregate principal amount of notes for $19.8 million, the stated upper limit being $50 million and purchase price being not more than 27% of face value.

Currently notes with an aggregate face value of $1.507 billion remain outstanding, and $79.51 million of them are held by DTEK Holdings Limited.

Following the announcement of a new tender, the price of the DTEK Energy notes on the Frankfurt Stock Exchange rose from 27.35% to 38.85% of face value.

DTEK Energy's sister company DTEK Renewables, as the result of the latest tender offer, bought back notes maturing in 2024 with a total par value of 35.471 million euros for 15.833 million euros in February. The purchase price was about 42.2% of face value, while as the result of a similar tender at the end of last year, notes were purchased for only 2.583 million euros at 30% of the face value, or an aggregate face value of 8.6 million euros with a total issue volume of 325 million euros.

DTEK Energy is the largest privately owned generating company in Ukraine, responsible for coal mining and power generation from coal. The company is part of Rinat Akhmetov's DTEK energy holding, which was set up in 2005.