Ukrzaliznytsia temporarily suspends payments on Eurobonds

The Ukrzaliznytsia joint-stock company has decided to temporarily suspend coupon payments on Eurobonds issued before the full-scale invasion in 2019 and 2021 to preserve liquidity from January 9, 2025.

This is said in a statement by Ukrzaliznytsia, the Ukrainian News agency reports.

"Against the backdrop of large-scale destruction and deterioration of operational processes as a result of the war, the liquidity situation of Ukrzaliznytsia is further complicated. The total amount of debt on the 2019 and 2021 Eurobonds is over USD 1 billion. Of this amount, over USD 700 million is due in 2019 and 2021. USD 700 million of which are due in July 2026," the statement said.

It is noted that such a decision is due to the need to ensure the uninterrupted rail transportation and timely payment of wages to railway workers.

The main prerequisites for the termination of debt service on Eurobonds are: continued reduction in cargo transportation; increased attacks on the railway; increased costs of restoring damaged infrastructure, rolling stock and other property; a significant increase in the cost of energy and materials and a significant historical loss of the passenger transportation segment.

The company assured that despite the critical financial condition, Ukrzaliznytsia made extraordinary efforts to properly service the Eurobonds in 2025 in order to maintain constructive relations with the Eurobond holders as part of the expected restructuring of financial obligations.

However, Ukrzaliznytsia, with the professional support of its advisors, is working on a strategic solution and looks forward to constructive negotiations with the Eurobond holders to reduce the financial burden.

As the Ukrainian News agency earlier reported, in early January 2025 Ukrzaliznytsia paid the January coupon on Eurobonds, which it had previously wanted to postpone.