Ukrenergo

Ukrenergo, Ukraine’s state-owned transmission system operator, announced that it has reached agreement with an ad hoc committee of bondholders and other investors in its outstanding $825m state-guaranteed Eurobond, together representing over 45% of the notes, on amended restructuring terms. The agreed terms envisage a cash tender offer and an exchange into new Ukrenergo securities without a government guarantee. The cash tender is conditional on Ukrenergo securing $445m in financing from an undisclosed development finance institution (DFI). The new bonds will carry an 8.5% coupon (vs. 6.875% currently) and amortize semi-annually from June 2028 to December 2031 in equal 12.5% installments. The first coupon will be paid shortly after settlement and include accrued interest from July 1, 2025. Bondholders may tender via an unmodified reverse Dutch auction with a ceiling price of 65.125% of combined principal initial and past due interest (PDI) calculated to July 1, 2025. If oversubscribed at the cut-off price, allocations will be made pro rata, with any unaccepted bonds redirected to the exchange offer. If the tender is undersubscribed, remaining funds will be used to repurchase untendered bonds at 60% of principal plus PDI. To fully utilize the $445m allocated for the tender, the company will repurchase voluntarily tendered bonds at the lower of (i) 68.7% of principal + PDI, or (ii) a price that ensures the average repurchase price across all bonds (voluntarily and non-voluntarily tendered) does not exceed 67.125%. Voluntary participants will exchange at a 1.0x ratio after the cash tender ($1 of new notes per $1 of initial principal and PDI), while bonds not voluntarily tendered for cash or exchange will be exchanged at a 0.8x ratio. Bondholders participating in the exchange offer will receive a consent fee of 2% if the $445m is fully utilized, and 1% otherwise.

State power transmission system operator Ukrenergo reported 1H25 revenue of $1.8bn (+1.3% h-o-h, +2.7% y-o-y), with net losses shrinking to $12m from $698m in 2H24 and $248m in 1H24. End-June cash dropped 1.3% h-o-h to $364m (still +60% y-o-y), mostly held in Ukraine. Total debt increased 3.9% h-o-h to $2.5bn (+11% y-o-y), implying a Debt/EBITDA of 4.2x, down from 5.5x in 1H24 and 4.7x as of end of 2024.