DTEK Energo again extends Eurobond buyback deadline
MOSCOW. Oct 5 (Interfax) - DTEK Holdings Limited has for the third time extended its deadline for bids in a Dutch auction to buy back $50 million of DTEK Energy Eurobonds due in 2027, Ukrainian media said.
The company has also extended the deadline for bondholders to submit statements of consent to ease a number of covenants on these bonds by five days, i.e. until October 9, inclusive.
The offeror and the issuer will later publish amendments to the altered and modified tender offer and memorandum seeking consent, dated September 25, 2023, that reflect the course of discussions on the terms of the proposed amendments to the agreement with the group of bondholders, the company said in a 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 new expected deadline for announcing the results is October 10 and for settlements is October 27.
As reported, 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 deadline was then extended twice - by five days and by two days.
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 now has a total of $1,496,874,000 billion in bonds outstanding, of which $271.23 million are held by DTEK Energy.
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.
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.