Cabinet of Ministers agrees on terms of restructuring of Naftogaz's defaulted bonds

The Cabinet of Ministers agreed on the terms of the restructuring of the defaulted bonds of Naftogaz of Ukraine, said Oleksiy Chernyshov, the chairman of the board of the enterprise.

"The new conditions for the restructuring of Eurobonds of the Naftogaz group have been approved. As planned, we must complete the procedure by the end of the summer of 2023," Chernyshov said on Facebook.

The government order is also published on its website.

Previously, the terms of the restructuring of Eurobonds with maturities in 2022 and 2026 were agreed with investors, and they were also approved by the company's board and supervisory board.

To the owners of default Eurobonds-2022 for $335 million, which Naftogaz had to repay last year, the company offered to pay 5% of the principal amount of the debt, overdue interest, overdue last year's payment, and additional interest by the end of July.

Naftogaz has to pay 50% of the remaining principal amount of the debt in July 2024, and another 50% in July 2025. Interest to be paid in January 2024 will be deferred until July 2024 with the possibility of capitalization, and the rate on Eurobonds 2022 will increase to 7.65% after the restructuring.

The company offered to pay 0.5% of the principal debt to the owners of Eurobonds for $500 million due in 2026 for agreeing to restructure. According to its terms, Naftogaz will be able to repay the securities in equal parts in November 2027 and November 2028. Interest payments will resume in 2024.

In 2019, Naftogaz placed three issues of Eurobonds: three-year for $335 million at 7.375%, five-year for 600 million euros at 7.125%, and seven-year for $500 million at 7.625%.

In the summer of 2022, Naftogaz of Ukraine defaulted on its Eurobonds due in 2022 and 2024. In the statement of the company, which was headed by Yuriy Vitrenko at the time, it was reported that it had money to settle with bondholders, but the Cabinet of Ministers did not allow it.

In August 2022, Naftogaz agreed with the owners of Eurobonds, whose maturity date was in July 2024, to postpone payments to 2026.