Ukrzaliznytsia has asked holders of its Eurobonds due 2024 for $594.9 million at 8.25% and Eurobonds-2026 for $300 million at 7.875% to defer all payments on them for 24 months.
“Given the group’s projections for fiscal years 2022 and 2023 and the financial plan for 2023 prepared and subject to approval by the Ukrainian government, and in particular against the background of the recent intensification of infrastructure shelling by Russia, the group believes it is time to initiate a consent request to complete the process before interest payments in January 2023,” Ukrzaliznytsia said in the stock exchange filings.
The company indicated that it expects to generate a net loss from transportation activities in 2022 and 2023, which it expects to mostly be offset by subsidies from the state budget, using them to cover operating and capital expenses. During this period, capital expenditures are also expected to be partially covered by financing from international financial institutions.
“Ukrzaliznytsia recalls that despite unprecedented economic and operational uncertainty, with vital government assistance it was able to successfully and fully service the interest payments due on its Eurobond debt in July 2022.
The company also noted that Ukraine was able to achieve a similar two-year deferral of payments on its Eurobonds in the summer.
“Since then, the operating environment and economic conditions have continued to deteriorate, and it is unclear when the war will end,” Ukrzaliznytsia stated.
The company, unlike the government, offers a reward for agreeing to defer payments of 0.5% of par.
On the deferred coupon payments also accrue interest at current rates, which the issuer can either pay in full or in part in the specified two years, or capitalize.
Applications from holders of Eurobonds-2026 are accepted until December 16, inclusive, and from Eurobonds-2024 – until December 20. A meeting is scheduled for December 21 on Eurobonds-2026, and the results will be announced on the same day for both issues.
The maturity of Eurobonds-2024 is proposed to be postponed from July 9, 2024 to July 9, 2026, and Eurobonds-2026 from July 15, 2026 to July 15, 2028, with coupon payments for each issue being made semi-annually.
The documents also state that Ukrzaliznytsia intends to treat the holders of both bond issues equally, but reserves the right to waive the “cross condition” at any time before the announcement of the results.
Prices of Ukrainian Eurobonds, which stabilized the week before last after a month-long 20% drop, resumed a slow decline last week, losing an average of 3% and dropping to a level near a historic low.
According to Bloomberg, at the short end, the losses were less than in its middle and at the long end, in particular, 2025 dollar Eurobonds fell in price by only 0.9%, to 21.9% of par, which corresponds to a yield of about 75.8% per annum. .
Eurobonds in dollars maturing in 2026-2030 were quoted at the end of last Friday in the range of 17.9-19.3%, which is on average 0.6 percentage points (pp) lower than a week earlier, and their current rates range from 63.5% to 42.7% per annum.
The price of the longest dollar securities maturing in 2031 and 2034-2035 fell the most – by an average of 4.6%, or 0.8 percentage points. – up to 16.7-16.5% of the face value, which corresponds to a yield of 38-35.4% per annum.
As for eurobonds in euros, bonds maturing in 2028 fell in price by 2.8% over the week, to 17.5% of par, and in 2032, by 4.7%, to 15.8% of par. Given the lower nominal interest rate compared to dollar securities, this corresponded to a yield to maturity of 50.6% in the first case and 34.2% per annum in the second.
At the same time, quotes of GDP-warrants remained at the same level last week – 26.2% of the conditional value.
The State Agency for Highways of Ukraine (Ukravtodor) is considering the possibility of attracting additional funding for road repairs this year.
“We are considering all possible options, in particular, both credit and grant funds. We are negotiating with our European partners and not only with them about raising funds from various sources. It is too early to talk about any specific decisions and projects, but I think that in a month we will be able to substantively announce the final stage of negotiations and the amounts that we can raise before the end of this year,” Andriy Ivko, first deputy head of Ukravtodor, said in an interview with Interfax-Ukraine.
He noted that even after the agreed deferment of payments on Eurobonds, international partners are ready to meet halfway in matters of attracting additional financing by Ukravtodor.
“Even in civilian life, these are common practices in both the public and private sectors. We have force majeure, the biggest war on the European continent continues, so they meet us halfway. And restructuring will make it easier for us to endure what is happening today. I have from a financial point of view,” he said.
As reported, since August 11, 2022, Ukravtodor, which placed debut Eurobonds worth $700 million maturing in 2028 at a rate of 6.25% in June last year under state guarantees, received the consent of the holders of these securities to defer interest payments on them and transfer their maturity for two years.
Vodafone Ukraine, which is part of NEQSOL Holding, announces the completion of regular interest payments on Eurobonds.
On February 11, 2020, the Company successfully priced its debut international capital markets issuance – 5-year bonds (“Eurobonds”) amounting to $500 million with a yield of 6.20%. Vodafone marked the lowest price in the entire history of Eurobonds issuance by a corporate issuer from Ukraine.
In accordance with the placement conditions, the coupon, namely the interest on the placed bonds, shall be paid every 6 months.
“Despite the difficult conditions caused by the war and the subsequent economic downturn, we continue to fulfill our commitments. This demonstrates the stability of our business and loan funds management efficiency, – commented on the payments Olga Ustynova, Vodafone Ukraine CEO. – The Company remains committed to maintaining a robust liquidity position as well as a sustainable debt leverage profile.”
As of today, the amount of the bond balance is $400 million. The Company has already redeemed and made a premature payment of $100 million.
Vodafone Ukraine has been successfully operating on the international debt capital market since 2018.
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For additional information, please contact:
Vodafone
Investor Relations
IR@vodafone.ua
About Vodafone
Vodafone is one of the world’s largest telecommunications companies and provides a range of services including mobile voice, data, messaging, fixed broadband and cable television. The operator has mobile operations in 21 countries, partners with mobile networks in 52 countries. As of 31 December 2021, Vodafone had over 300 million mobile customers, 28 million fixed broadband customers. The Company connects over 142 mil IoT devices and platforms. For more information, please visit www.vodafone.com.
Vodafone Ukraine is a leading mobile operator in Ukraine that provides high-speed 3G and 4G Internet services. Vodafone’s investments during the active construction of high-speed Internet networks in 2015-1Q2022 exceeded UAH 32.7 bln. The record investments allowed to provide technological leadership and to develop new technological services – Internet of Things (IoT), technologies and solutions for Smart City, big data analytics, Fintech services, cloud services. Vodafone has over 19 million customers in Ukraine. Since December 2019, Vodafone Ukraine has been part of NEQSOL Holding.
About NEQSOL Holding
NEQSOL Holding is a diversified group of companies operating across industries and countries. The main business areas cover oil and gas, telecommunications, hi-tech, and construction industries.
The group of companies operates in the UK, the USA, Turkey, Azerbaijan, Ukraine, Georgia, Kazakhstan, the UAE, and other countries.
The State Agency for Highways of Ukraine (Ukravtodor), which placed its debut Eurobonds worth $700 million at a rate of 6.25% last June under state guarantees, after Ukraine announced a proposal for a two-year deferral of payments on its Eurobonds, is now time is also evaluating options for managing its obligations.
“After this assessment is completed, it is likely that bonds will be followed by a similar liability management exercise in the near future,” Ukravtodor said in a London Stock Exchange announcement on Monday.
Ukraine, in its offer to holders of its sovereign bonds to defer payments on them for two years, indicated that it expects a similar offer from state NPCs Ukrenergo and Ukravtodor for their Eurobonds issued under state guarantees.
In November last year, Ukrenergo placed, under state guarantees, debut five-year “green” Eurobonds worth $825 million with a yield of 6.875% and interest payments twice a year. The proceeds from the issue of Eurobonds were used to pay for electricity produced by RES generation.
As reported, on July 20, Ukraine proposed to holders of Eurobonds from August 1 to defer all payments on them and maturities for two years, while maintaining the current rates of return.
In addition, Ukraine’s international partners within the G7 and the Paris Club of creditors announced their readiness to suspend the payment of Ukraine’s debt until the end of 2023 with the possibility of extending the deferment for another year. They also urged private lenders to accept Ukraine’s offer to defer payments on its Eurobonds and change the terms of its GDP warrants.
According to the website of the Frankfurt Stock Exchange, on Friday, July 22, Eurobonds of Ukravtodor were quoted at a price of 17.64% of the face value, which is slightly lower than the quotations of sovereign Eurobonds of the same maturity year (about 20%).
The energy holding DTEK Energo asked the holders of its Eurobonds for $1.645 billion maturing in 2027 to agree to the payment of the next two coupons for the first and second quarters of this year at a rate of 3.5% per annum, with a capitalization of the remaining 4% at a rate of 8.5% per annum and paid later.
According to the company’s announcement on the London Stock Exchange, DTEK Energo expects a response from the holders by 16:00 London time on April 8.
In case of a positive answer, half of the coupon due on March 31 will be paid the next day after the approval of the Eurobond holders’ consent, and half of the coupon on June 30 – on the same day, June 30.
Earlier in March, the agricultural holding MHP, the largest producer of chicken meat in Ukraine, had already approached holders of three issues of its Eurobonds worth $1.4 billion and creditor banks worth $126 million with a proposal to defer interest payments for 270 days due to the war launched by Russia against Ukraine. MHP received a positive response from its creditors ahead of schedule.
“The revision of the conditions for making coupon payments to holders of DTEK Energy’s Eurobonds was caused by a significant deterioration in the company’s financial performance in March 2022 amid the war with the Russian Federation (…) This is an expected step during the war in Ukraine,” Interfax-Ukraine was previously explained “The company needs this step.
In the latest exchange announcement, DTEK Energy indicated that due to the war unleashed by Russia, it faced a number of serious problems and disruptions, including, among other things, a reduction in domestic demand for electricity and a decrease in its prices (up to UAH 1,800–2,000 per MWh ). In addition, exports were stopped until March 28, and after the resumption they go only to Poland and are limited to 200 MW per day, the collection of payments has significantly decreased, critical repairs and mandatory fixed costs have increased as a result of the damage incurred, and there is also a shortage of personnel and logistics. support.
The company added that on February 25, it lost control over the Luhanska TPP, and the Zaporizhzhya TPP, due to the impossibility of delivering coal reserves to it due to damage and disruptions in the operation of the railway infrastructure, operates only one unit. During March, DTEK Energy was able to operate on average only 9 to 13 units of its thermal power plants with a total capacity of only about 1,500 MW, and, accordingly, its electricity production fell by about 30% compared to March 2021, the report specifies.
As a result, the group posted negative operating cash flow for March 2022 and expects this to continue through at least the second quarter of 2022.
DTEK Energy also allows for the postponing of the publication of its audited consolidated financial statements for 2021, given the scale of disruptions in the group’s business and operating environment and the need to provide additional time for auditors to analyze conditions in Ukraine and their impact.
Earlier, when addressing creditors, the company emphasized that it had already taken a number of measures to mitigate the consequences and to rationalize operations and cash flows. Among them, in particular, the constant balancing of the necessary efficient production based on the ratio of fixed and variable costs and the collection of payments; negotiations with the regulator and other government agencies to maintain a proper business environment; minimizing capex and optimizing administrative costs.
“(…) in the current circumstances, the proposals are in the interests of the company, its creditors and all interested parties (…). DTEK Energy is confident in the understanding and support of the international investment community, which is extremely important so that it can firmly and unitedly fight for the integrity freedom and security of independent Ukraine,” the company noted on March 31, when it first announced its intention to capitalize and defer the payment of half of the next two coupons.
DTEK Energy is an operating company responsible for coal mining and electricity generation from coal within Rinat Akhmetov’s DTEK holding.
