Naftogaz regains investor trust and resumes dialogue with Eurobonds holders

Naftogaz has addressed holders of its 2022 and 2026 Eurobonds offering to intensify engagement to identify a mutually acceptable solution, according to a statement published by the Company via the Irish Stock Exchange on 18 November 2022.

«One of our key priorities is to restore trust in Naftogaz, particularly among our investors. The proposal to resume constructive dialogue is the first step towards this goal,” commented Naftogaz CEO Oleksiy Chernyshov.

The announcement states that Naftogaz has appointed Lazard Frères SAS (Lazard) as its exclusive financial advisor in line with Resolution of the Cabinet of Ministers of Ukraine (No. 1003-р 8 November 2022). Lazard will coordinate the negotiation process together with AEQUO and Freshfields Bruckhaus Deringer, legal advisors to Naftogaz.

Separately, the Company outlined its priorities upon the appointment of the new CEO:

  • ensuring energy stability and independence;
  • increasing trust in Naftogaz on the part of the state, international partners, creditors, and investors;
  • securing sustainable passage of the current heating season.

For reference:

In July 2019, Naftogaz acted through Kondor Finance plc (a public limited liability company registered under the laws of England and Wales) to issue Eurobonds in two tranches: tranche A with a nominal value of EUR 600 million due in July 2024 and tranche B of USD 335 million due in July 2022.

In November 2019, Naftogaz issued Eurobonds with a nominal value of USD 500 million due in November 2026, also through Kondor Finance plc.

On 26 July 2022, Naftogaz was not in a position to make scheduled payments to holders of its Eurobonds.

In August 2022, Naftogaz succeeded in soliciting the consent of 2024 Eurobonds holders. 77% of investors voted “for” and agreed to the proposal to postpone payments by two years.

However, investors who own Eurobonds due in July 2022 and November 2026 did not agree to Naftogaz’s proposal to postpone repayments.

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