Naftogaz asks creditors to defer debt payments as Russian invasion takes its toll on energy giant
Naftogaz has asked its international creditors to defer payments on its debt for the next two years.
Ukraine’s state-owned energy giant is struggling for cash, with many of its customers unable to pay their bills amid continued conflict across the country following Russia’s invasion.
The company has $335m bond maturing alongside two interest payments due on July 19.
In its request for the payment freeze, Naftogaz said the five-month old war had resulted in a “significant economic and business decline in Ukraine” and that the missed bill payments had “negatively affected its liquidity position”.
Naftogaz’s gas financing arm Kondor Finance said in a statement published late on Monday: “The Issuer, at the request of the Borrower, has launched this Consent Solicitation in order to seek approval from Noteholders to facilitate preservation of available cash … to support Ukraine’s strategic priorities.”
Bondholders have until July 21 to vote on the plan, which will defer all of the company’s main international bond payments until July 2024.
In addition to the bond due next week and in 2024, it also has a further bond that runs until 2026.
Naftogaz is a major source of income for Ukraine, with its revenues accounting for around 17 per cent of the state budget last year, and for around half of the country’s financial resources since the Russia’s invasion.
The company told City PM last month it was facing a serious shortfall in energy this winter, requiring 5.8bn cubic meters to meet the consumption needs of its customers.