DTEK Energy extends tender offer to buy back $50 mln in Eurobonds by another two days
MOSCOW. Sept 29 (Interfax) - DTEK Holdings Limited has extended its deadline for bids in a Dutch auction to buy back $50 million of DTEK Energy Eurobonds due in 2027 until October 4, inclusive.
The company has also extended the deadline for bondholders to submit statements of consent to ease a number of covenants on these bonds until October 4, Ukrainian media reported, citing a company filing on the Irish Stock Exchange.
On September 25, following negotiations with a group of DTEK Energy Eurobond holders, DTEK Holdings raised the compensation for consent to ease covenants to 1% from 0.75% and pledged not to reduce the announced amount of the buyback, $50 million, allowing bondholders to withdraw their consent if their tender offers are not accepted.
The deadline for bids was initially the evening of September 26, and the company had previously said it retained the right to change the maximum amount of the buyback.
The company also previously asked bondholders to reconsider covenants on the bonds in order to provide more possibilities for investment and repairs. It noted that developing energy storage systems is important for Ukraine's energy market and that it wants to invest in this sector, but this is restricted by the current terms of the bonds. The company said it also needs to repair and replace damaged or obsolete equipment, which requires substantial capital expenditures.
Another reason given for revising the covenants is the replacement of the original issuer of the bonds, DTEK Finance plc with parent company DTEK Energy B.V. at the end of November 2022, as existing restrictions could interfere with the company's normal business activities.
DTEK previously announced a similar auction in March 2023, initially for up to $30 million but the amount was later raised to $80 million. As a result, it bought back bonds for the whole amount with face value of $181 million at a price of about 41.33% of face value, generating a positive financial result for the company of UAH3.366 billion.
Prior to this, in December 2022 the company bought back Eurobonds for $19.8 million out of a maximum announced amount of $50 million at a maximum price of 27% of face value. In its report for the first half of 2023, DTEK Energy valued these bonds at the market price of 56.7% of face value, whereas at the start of the year it was at 30.7%.
DTEK now has a total of about $1.487 billion in bonds outstanding, of which $271.23 million are held by DTEK Energy.
DTEK Energy reported a net profit of UAH6.23 billion for the first half of 2023 compared to a net loss of UAH1.41 billion in the same period of 2022, although revenue slumped 6.5% to UAH29.9 billion.
The company's free cash flow rose to UAH2.83 billion at the end of June from UAH2.01 billion at the start of 2023 and UAH2.763 billion in mid-2022.
The official exchange rate was UAH36.57/$1 on September 29.