Naftogaz Ukrainy

Naftogaz held a conference call with its bondholders on Friday, presenting an updated working scenario of its consent solicitation to be offered to the holders of its 2022 and 2026 Eurobonds. The company offered to defer 50% of the principal originally due on Jul. 19, 2022, for two years, until Jul. 19, 2024, and the other 50% for three years, until Jul. 19, 2025. It also proposed a cash payment on the settlement date (after the restructuring offer is accepted by bondholders), amounting to the sum of interest that was due on Jul. 19, 2022, and additional interest on this amount accrued until the settlement date, plus 5% of the principal ($16.8m). Coupons under a new payment schedule (excluding the Jan. 19, 2022, coupon) would be accrued at an increased rate of 7.65% (vs. original rate of 7.375%) until the new maturity date, along with interest on interest. Concerning the 2026 notes, Naftogaz offered to defer 50% of the principal originally due on Nov. 8, 2026, for one year, until Nov. 8, 2027 and the other 50% for two years, until Nov. 8, 2028, as well as defer interest payments for two years, until Nov. 8, 2024, and pay interest on interest. The company offered a 0.5% consent fee to the 2026s holders to be paid on the settlement date.

Naftogaz CEO Oleksiy Chernyshov said the company planned to do without gas imports in 2023 in the base case scenario, for which Naftogaz needed to increase own production by 8% and private gas producers by 16%. In other scenarios, 2023 gas imports may range from 2-5 bcm, with the higher figure being in line with the IMF projection from last December. For the current heating season ending in April, Naftogaz has imported close half of the planned 2 bcm.