{"id":680,"date":"2022-07-14T19:10:55","date_gmt":"2022-07-14T19:10:55","guid":{"rendered":"http:\/\/roydadnaft.ir\/English\/?p=680"},"modified":"2022-07-14T19:10:57","modified_gmt":"2022-07-14T19:10:57","slug":"ukraines-naftogaz-bondholders-urged-to-reject-debt-freeze-plan","status":"publish","type":"post","link":"https:\/\/roydadnaft.ir\/English\/680\/","title":{"rendered":"Ukraine’s Naftogaz bondholders urged to reject debt freeze plan"},"content":{"rendered":"
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Creditors of Ukraine’s state-owned energy firm Naftogaz have been urged to reject the company’s request this week for a two-year debt payment freeze.<\/p>\n\n\n\n

Naftogaz made the proposal on Monday, saying Russia’s invasion of the country has left it short of cash as customers have been unable to pay their bills.\u00a0<\/p>\n\n\n\n

In a call organised by London-based legal firm Dechert, which has been appointed by creditors, advisors said they did not think the company was facing an immediate cash crunch and was viewed as a profitable going concern.<\/p>\n\n\n\n

As a result, they would demand full repayment of one of the firm’s bonds which is due next week, along with an additional ‘coupon’ interest payment on another bond that runs until 2024.<\/p>\n\n\n\n

“The advice is to vote this down,” one investor on the call said.<\/p>\n\n\n\n

The advisors also stated that bondholders were not forming a steering committee – a core group of creditors which leads debt renegotiations – at the moment.<\/p>\n\n\n\n

They added they would be prepared to look again if there was no improvement in the country’s situation by the time the next major bond matures in 2024.<\/p>\n\n\n\n

Naftogaz is a major source of income for Ukraine, accounting for almost 17% of the country’s total state budget revenue last year and employing more than 50,000 people before the war.<\/p>\n\n\n\n

Its underground storage facilities hold over 30 billion cubic metres of gas, making them the third largest in the world after the United States and Russia. It also has Europe’s second largest oil transportation pipeline network.<\/p>\n\n\n\n

The company’s request on Monday caught many creditors off guard, coming with little over a week to go before a $335 million bond is due to pay out on July 19.<\/p>\n\n\n\n

It has also raised expectations that Ukraine’s government may look to do something similar itself ahead of a near $1 billion sovereign bond payment due in September.<\/p>\n\n\n\n

Kyiv has so far said that it intends to make that payment but many of the Naftogaz bondholders also lent money to the government, meaning that sentiment could suffer.<\/p>\n\n\n\n

The International Monetary Fund, which the country relies on heavily for support, said on Thursday that it expects Kyiv to continue paying its debt.\u00a0<\/p>\n\n\n\n

Reporting by Marc Jones; editing by Carolyn Cohn and Susan Fenton<\/p>\n

Updated on