Naftogaz To Immediately Propose New Agreement On Obtaining Consent Of Eurobond Holders To Postpone Payments

The Naftogaz of Ukraine national joint-stock company intends to immediately propose a new agreement on obtaining the consent of Eurobond holders to postpone payments.

The company has said this in a statement, Ukrainian News Agency reports.

"Naftogaz will immediately offer a new agreement to obtain the consent of Eurobond holders to postpone payments. The national company will immediately offer holders of Eurobonds an agreement to postpone payments in accordance with the conditions specified by the government in the order of the Cabinet of Ministers of Ukraine No. 625-r of July 21, 2022. This process should be the part of the joint actions of the government and other state-owned companies regarding the proposal of similar conditions for postponing payments on Eurobonds," the statement reads.

According to the statement, Naftogaz is working with all interested parties to obtain the consent of Eurobond holders.

As Ukrainian News Agency earlier reported, the Cabinet of Ministers defaulted on Naftogaz Eurobonds.

On July 26, the Naftogaz of Ukraine national joint-stock company had to make payments on Eurobonds or obtain the consent of Eurobond owners to postpone payments.

The Cabinet of Ministers recognized the work of the Naftogaz board regarding changing the credit terms of Eurobonds as unsatisfactory.

The Fitch Ratings international rating agency lowered the long-term issuer default rating (IDR) of Naftogaz of Ukraine from CCC to C after the company requested consent to postpone debt service on its Eurobonds, including those due on July 19, 2022.

In particular, the agency notes that Naftogaz is asking to postpone payments of the principal amount of the debt and the coupon for its bonds in the amount of USD 335 million, which is due for repayment on July 19, 2022, until July 2024.

In the context of this requirement and Naftogaz's weak liquidity, Fitch believes that the consent request was made to avoid default.

In November 2019, the Naftogaz of Ukraine national joint-stock company placed 7-year Eurobonds in the amount of USD 500 million with a rate of 7.625% per annum.

Also in July 2019, Naftogaz placed 5-year Eurobonds for EUR 600 million at an annual rate of 7.125% and 3-year Eurobonds for USD 335 million at an annual rate of 7.375%.

The Kondor Finance company is engaged in the issue of Naftogaz Eurobonds.

The Naftogaz of Ukraine national joint-stock company is a leading enterprise of the country's fuel and energy complex, which is engaged in prospecting and development of deposits, drilling, transportation and storage of oil and gas, as well as supplying gas to consumers.