DTEK Oil & Gas needs consent from additional 1.13% of eurobond holders for fast-track restructuring, given another 7 days
DTEK Oil & Gas has extended by one week, ending on or prior May 7, the deadline for holders of its $425 million eurobonds issued via NGD Holdings B.V. to submit consents to extend the maturity by three years and increase the coupon rate from 6.75% to 9.875% per annum.
According to a stock exchange announcement by DTEK Oil & Gas, as of April 30, consent had already been received from holders of 88.87% of the bonds, whereas more than 90% is required to carry out the restructuring on the terms proposed by the company.
At the same time, the issuer warned that if the 90% threshold is not reached, it may proceed via an alternative route that requires approval either from 50% of bondholders by number or from holders of 75% of the total principal amount of the bonds. However, in that case, the consent fee offered to all participating eurobond holders in the total amount of $2.75 million would not be paid.
This is already the second extension of the consent solicitation deadline: on April 23, the company reported having received consent from holders of 88.66% of the bonds and extended the deadline by seven days.
Under the restructuring terms proposed by DTEK Oil & Gas on April 9, the increased coupon rate of 9.875% is to accrue from April 30 of this year, while the principal is to be repaid gradually: $27.5 million on April 30 of this year, followed by $27.5 million every six months, on December 31 and June 30, with the remaining balance to be repaid at final maturity on December 31, 2029.
The company is also seeking bondholder consent to allow it not to publish financial statements until the end of martial law, as regulatory resolutions of the National Energy and Utilities Regulatory Commission limit its ability to publicly disclose certain financial and operational information and data.
In justifying the restructuring, DTEK Oil & Gas also referred to the National Bank of Ukraine’s moratorium on cross-border transfers, which significantly restricts the company’s ability to transfer funds from Ukraine abroad to service its bonds.
Russian shelling has damaged the group’s infrastructure facilities four times (mainly gas compressors). Repair works are ongoing and are expected to require total capital expenditures of approximately EUR 25 million.
DTEK Oil & Gas said that consolidated revenue from gas product sales (including sales of natural gas, gas condensate, and purchased natural gas) decreased from UAH 27.04 billion in 2023 to UAH 19.84 billion in 2024, mainly due to the natural depletion of wells.
Consolidated natural gas production amounted to approximately 1.3 billion cubic meters in 2025 and is expected to remain within the historical range in 2026.
"Primarily due to the impact of the NBU moratorium, the issuer expects that it will not be able to redeem the bonds on the maturity date (December 31, 2026)," the company said.
It also noted that its subsidiaries NGD and Kosul hold rights to develop certain deep-horizon project areas that have particularly complex geological and technical characteristics, and therefore will require significantly higher capital investment than more conventional project areas. As a result, these areas have not yet been developed, but in the near future it is proposed to transfer the license rights to one or more new special purpose vehicles (SPVs), which will then seek to develop these areas while sharing project risks, including by attracting one or more joint venture and financial partners.
To implement these projects, DTEK Oil & Gas is seeking creditor consent to enable the establishment of new direct or indirect subsidiaries that will act both as operating companies in relation to the SPVs and as holding companies for one or more SPVs. It is also seeking approval for the sale and transfer to one or more SPVs of subsoil use rights held by NGD and Kosul in respect of two licensed areas at depths exceeding 6,250 meters, followed by the involvement of third parties at fair market value.
As reported, DTEK Oil & Gas produced 2 billion cubic meters of natural gas in 2022 (2.06 billion cubic meters in 2021).
Companies within DTEK Oil & Gas in November 2022 acquired at an open auction the rights to develop two gas fields in Poltava region: the Maiorivska area for UAH 1.102 billion and the Birkivsko-Zinkivska area for UAH 211 million.
According to data from the Frankfurt Stock Exchange, DTEK Oil & Gas bonds are quoted at 92.63% of par. On the day the restructuring proposal was announced, they were quoted at 91% of par.
