Naftogaz of Ukraine announces default on Eurobonds

Naftogaz of Ukraine NJSC has not made payments to Eurobond holders, which indicates default.

The relevant statement was made by Naftogaz of Ukraine NJSC on Telegram, an Ukrinform correspondent reports.

“On July 26, 2022, the deadline for payments to Naftogaz’s Eurobond holders expired,” the report states.

Earlier, on July 21, 2022, the Cabinet of Ministers of Ukraine, acting as the General Meeting of Naftogaz of Ukraine NJSC, endorsed Resolution No. 625-p, obliging the company’s officials to seek the approval of the Cabinet of Ministers when taking any actions regarding Eurobonds.

In order to implement the Government’s decision and meet the obligations of the national company, Naftogaz’s management timely applied for the approval of the Cabinet of Ministers of Ukraine. In its official letter to the Government, the company indicated the availability of funds in its accounts, which were enough to make Eurobond payments, as well as described the risks and negative effects for the company and the country in case of ‘hard default’ on Eurobonds.

Meanwhile, the Cabinet of Ministers of Ukraine did not provide permission for Naftogaz of Ukraine NJSC to make due payments to Eurobond holders for the 2022 issue and the 2024 issue.

Hence, according to Naftogaz of Ukraine NJSC, the Government defaulted on the company’s Eurobonds. As the failure to meet its Eurobond obligations has actually deprived Naftogaz of Ukraine NJSC of access to the international capital market, the Cabinet of Ministers as the responsible party now assumes full responsibility for raising the funds necessary for the import of natural gas for the 2022/2023 heating season, the company noted.

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