The latest proposal to restructure the debt of Ukraine’s state-owned oil and gas company, NJSC Naftogaz Ukrainy, faces opposition from a group that rejected previous plans to delay principal and interest payments on $835 million of bad debt.
A group of creditors advised by Cleary Gottlieb Steen & Hamilton refused to agree to Naftogaz’s debt restructuring proposal because it believed the company would be able to make its payments, according to a person familiar with the matter, who requested anonymity due to the privacy of the information. Pointing out that the group has enough influence to prevent Naftogaz from obtaining the support of 75% of creditors, which is necessary to approve the restructuring.
Ukrainian energy company: Default is inevitable after defaulting on payments
Ukraine’s largest energy company has requested a debt freeze for two years and has not already made payments to bondholders to provide cash for gas purchases after the Russian invasion turned the economy upside down.
Naftogaz defaulted on its 2022 and 2026 bonds last year after failing to gather enough bondholder support to delay its payment, while reaching an agreement to restructure its 2024 bonds.
The group has submitted its own “bona fide” plan that takes into account Naftogaz’s financial condition as well as legitimate concerns about its need to fully support Ukraine’s economy and its critical infrastructure,” according to a statement emailed to the law firm Monday. 2022 and 2026, in addition to securities originally due in 2024.
Ukraine seeks to postpone the payment of its foreign debt after its economy was affected by the war
Although the group’s opposition may delay processing defaults, creditors have not yet begun a process to accelerate payments or seize assets.
Naftogaz has referred a request for comment to Lazard Frères SAS, which the company has hired to help restructure its debt. A spokeswoman for Lazard declined to comment.
