The second largest Ukrainian mobile operator VF Ukraine (Vodafone Ukraine, VFU) held negotiations with holders of its eurobonds for $400 million on the possibility of their restructuring, but after the owners of approximately 31% of the securities refused the proposed terms, it decided to abandon further negotiations.

"In light of the above, VFU hereby announces that it does not, in the absence of changes to the capital controls, expect to engage in further negotiations with the bondholders. Instead, VFU will focus on other avenues for addressing its obligations under the notes, namely continuing its discussions with the relevant authorities in Ukraine, including the National Bank of Ukraine, on granting an exceptional approval for the payment of the notes’ principal due on February 11, 2025," the company said in a statement on the Irish Stock Exchange.

"Vodafone Ukraine hereby announces that during the period September 19-30, 2024 it engaged in restructuring negotiations with several major holders of the 6.2% notes due 2025 issued by the issuer for the sole purpose of financing a loan to VFU. Amidst the continuing capital controls restrictions that remain in place in Ukraine which currently prevent VFU from making cross-border payments out of Ukraine to repay the notes, VFU presented a restructuring proposal to such major holders and subsequently negotiated potential amendments," the report says.

"The potential amendments comprised of the following key terms: the extension of the maturity date of the notes by three years, the inclusion of a new mandatory prepayment provision requiring repayment of the notes promptly in the event of the relaxation of current capital controls, an increase of the interest rate of the notes to 7.7%, a pledge over VFU’s cash balances held in Ukraine for the purpose of repaying the notes, and the payment of a consent fee of 1.5% (the restructuring proposal). However, following negotiations, the restructuring proposal was rejected by bondholders holding approximately 31% of the notes," it states.

"VFU hereby confirms that, while it is currently prevented by the capital controls from making cross-border payments out of Ukraine to facilitate the repayment of the notes, its financial position remains strong and it has sufficient liquidity to satisfy its payments obligations within Ukraine as they fall due for the foreseeable future," the report states.

As reported, on February 14 of this year, the Ukrainian government applied to the National Bank with a petition to allow the sale of currency to large Ukrainian companies and holdings and its subsequent transfer for settlements on eurobonds and with Western creditors. The list included VF Ukraine, companies from the pipe and wheel holding Interpipe, the largest mining and metallurgical holding Metinvest, the agroholding Kernel and three DTEK holdings, namely DTEK Energy, DTEK Renewables and DTEK Oil and Gas.