Naftogaz has revealed its bondholders are set to refuse its two-year debt payment freeze request.
The Ukrainian state-owned energy giant also hit out at the country’s government for rejecting another plan by the company to keep making its payments.
It said in a statement that with so few bondholders supporting its debt freeze proposal ahead of a deadline on Tuesday, the “required quorum” needed to pass the plan was “not expected to be met”.
Sparately, the Ukraine’s cabient rejected a request from Naftogaz to go ahead with a $335m principal and interest payment on a bond due last week, alongside a separate interest installment on another bond that runs up to 2024.
It also had submitted another request last weekend to approve the payments and was awaiting a response.
Meanwhile, Naftogaz expects to formulate a new proposal to try and win bondholders’ approval.
Last year, the energy giant accounted for almost 17 per cent of government revenues – an increasingly key source of funds for the country following Russia’s invasion and months of continued conflict.
If Naftogaz doesn’t manage to convince its bondholders to agree to a plan in the coming days it will likely become the first Ukrainian entity to fall into a full-blown default.
The company also faces a 5.8bn cubic meter shortfall of gas heading into winter.
Ukraine’s government estimates it faces a fiscal deficit of roughly $5bn a month – or 2.5 per cent of pre-war GDP.
The EU’s financing arm, the European Investment Bank, has warned that the cost of rebuilding Ukraine could run into trillions of dollars.
The post Naftogaz suffers setback with bondholders rejecting debt freeze proposal appeared first on CityAM.
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