17 May 2023 19:22

Naftogaz of Ukraine preparing to finalize Eurobond restructuring proposals

MOSCOW. May 17 (Interfax) - Naftogaz of Ukraine is preparing to finalize proposals to restructure Eurobonds maturing in 2022 and 2026, Naftogaz CEO Alexei Chernyshov said.

"We are preparing to finalize the restructuring proposals and continue the dialogue with Eurobond holders. We will continue to act openly and transparently as this is a basis for regaining trust of our partners," Ukrainian media quoted Chernyshov as saying in a statement published on the Naftogaz's website on Wednesday.

This issue was discussed at a meeting between Chernyshov and the Lazard Freres SAS financial advisors on Wednesday, it said.

As reported, in March, Naftogaz of Ukraine improved its proposal for restructuring the 2022 Eurobonds, which defaulted in the summer of 2022, while the terms for defaulted 2026 Eurobonds remained the same.

It is proposed to increase the interest rate on the 2022 Eurobonds from the date of approval of the proposal from 7.375% to 7.65% per annum, and to pay another 5% of the principal amount along with the overdue coupon of July 19, 2022, which amounts to $12.35 million and $16.75 million, respectively, the presentation on Naftogaz's website said.

At the same time, as for the 2022 Eurobonds, Naftogaz offers to defer the payment of 50% of the principal debt for two years until July 19, 2024, and the remaining 50% until July 19, 2025, whereas in February it proposed maturing the entire issue on July 19, 2024.

As for the deferral of maturing the 2026 Eurobonds, the proposal remained the same: 50% for one year, until November 8, 2027, and another 50% until November 8, 2028.

The payment of interest on the 2022 Eurobonds due on January 19, 2023, July 19, 2023, and on January 19, 2024, is proposed to be postponed until July 19, 2024. As for the 2026 Eurobonds, the payment of interest is proposed to be moved from November 8, 2022, May 8, 2023, November 8, 2023, and May 8, 2024, to November 8, 2024.

As in February, an additional premium of about 0.5% is provided only for the 2026 Eurobonds.