By KYIV. Dec 9 (Interfax-Ukraine) – Ukrzaliznytsia has approached holders of its $594.9 million eurobonds due in 2024 at 8.25% and $300 million eurobonds due in 2026 for at 7.875% with a proposal to defer all payments on them for 24 months.
Given the Group’s forecasts for the 2022 and 2023 fiscal years and the 2023 financial plan prepared and subject to approval by the Government of Ukraine, and in particular amid the recent intensification of Russian shelling of infrastructure, the Group believes that the time has come to initiate a request for consent in order to complete the process before interest is paid in January 2023, Ukrzaliznytsia said in reports.
The company said that it expects to generate a net loss from transport activities in 2022 and 2023, which it expects to mainly offset through subsidies from the state budget, using them to cover operating and capital expenses. It is expected that during this period, capital investments will also be partially covered by financing from international financial institutions.
Ukrzaliznytsia recalled 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 said that in the summer Ukraine was able to achieve a similar two-year deferral of payments on its eurobonds.
"Since then, the operating environment and economic conditions have continued to deteriorate, and it is not known when the war will end," Ukrzaliznytsia said.
The company, unlike the state, offers a reward for agreeing to defer payments in the amount of 0.5% of par value.
Deferred coupon payments also bear interest at current rates, which the issuer can either pay in full or in part over the two years in question, or capitalize.
Applications from holders of eurobonds 2026 are accepted until December 16 inclusive, from holders of eurobonds 2024 – until December 20. For eurobonds 2026, a meeting is scheduled for December 21, and the results for both issues will be announced on the same day.
The maturity of eurobonds 2024 is proposed to be postponed from July 9, 2024 to July 9, 2026, and for eurobonds 2026 – from July 15, 2026 to July 15, 2028, coupon payments for each of the issues are made once every six months.
Ukrzaliznytsia intends to treat holders of both bond issues equally, but reserves the right to waive the "cross condition" at any time before the results are announced.
