Regarding the situation with Eurobonds

The Resolution of the CMU No. 625-p dated 21 July 2022 sets out that Naftogaz, in particular its officers and other authorized representatives, must take any actions related to the performance of the agreement on the Eurobonds transaction of the Company only after a separate approval of such actions by the Cabinet of Ministers of Ukraine.

Given that the proposal to defer the payments for the Eurobonds, driven by the position of the government to use these funds for the import of natural gas, was not supported by the bondholders, the original terms of the bonds continue to apply. Naftogaz is therefore required to make relevant payments of principal and interest on 26 July 2022 (within the grace period specified).

On 22 July 2022 the financial director of Naftogaz and on 23 July 2022 the CEO of Naftogaz, in line with the relevant decision of the board, applied to the CMU for approval of such payments in order to comply with the above decision of the government and also in order to comply with obligations of the national Company in relation to Eurobonds payments.

In their applications to the government the national Company informed that the Company had funds for making the payments, as well as informed on potential risks for the Company and the state in general in case of “hard default” (violation of payment obligations), which would occur if the state did not approve payments by Naftogaz to the bondholders.

At the time of publication of this press-release, Naftogaz did not receive approval of the government, and accordingly cannot transfer funds for payments to the bondholders.

We note that in order to comply with the above decision of the government Naftogaz is currently preparing a new Eurobonds consent solicitation transaction, which complies with the requirements of the government in full.

This information is disseminated in line with the Company’s obligations towards its creditors.

Note: In May of 2022 international auditors confirmed that Naftogaz again became profitable company based on the 2021 year-results, and that Naftogaz has ability to continue as a going concern in 2022, in particular to ensure its solvency even despite the full-scale war. The relevant financial statements were approved by the CMU.

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