NJSC Naftogaz Ukrainy announced that the proposal to postpone payments on eurobonds, which was due to the government's position to use these funds for natural gas import, did not find support among the eurobond holders and plans to take actions regarding the execution of the company's eurobonds transaction in connection with the government's ban on making payments under existing conditions and instructions to change these conditions.

Since the launch of the Request for Consent, Naftogaz has been engaged in constructive discussions with the bondholders. In light of Cabinet Resolution No. 625 dated July 21, which instructs Naftogaz to conclude a new agreement on terms different from those proposed in the Request for Consent, and limits further actions of Naftogaz without separate approval by the Cabinet of Ministers, Naftogaz expects to formulate a new proposal, the company said in a report on the stock exchange on Monday.

Naftogaz recalled that the deadline for accepting responses to its proposal to holders of eurobonds worth almost $1.5 billion to defer coupon payments on them for two years, including postponing the repayment of $335 million eurobonds 2022 for the same period, expired on July 21.

Based on the electronic voting instructions and sub-proxy forms received prior to the voting deadline, the proposal is not expected to be approved at the meeting to be held for the 2022 Notes and the required quorum is not expected to be reached at any of the meetings, which will be carried out in relation to the bonds of 2024 and 2026, Naftogaz said.

In addition, the company said that the government, by a resolution issued on July 21, prohibited payments on eurobonds 2022 and 2024 falling on July 19 without its prior consent.

On July 22, Naftogaz reached out to the Cabinet of Ministers of Ukraine for approval of these payments, which was not granted. Naftogaz submitted an additional request for approval of such a payment on July 23 and is awaiting a response from the Cabinet of Ministers, which has no obligation to respond within a certain period, the company said.

In accordance with Government Resolution No. 691 dated June 17, Naftogaz's priority remains the accumulation of sufficient natural gas before the 2022/23 heating season, which was the main reason for the proposal to defer payments.

Previously, Naftogaz said that to implement this decision, it needs to import an additional 4 billion cubic meters of gas worth about $8 billion.

The grace period for Naftogaz eurobonds is 5 business days. Naftogaz expected to obtain the consent of the holders for the postponement on July 26, the last day of this period.

In addition to Naftogaz, on July 20, Ukraine made a similar proposal to defer all payments for all 13 Eurobond issues for two years. In contrast to the NAC, the government proposed to holders of Eurobonds to extend the maturity of all securities by two years, and not just 2022.

There are currently three Naftogaz eurobond issues circulating on the market. All of them were placed in 2019: in July - three-year $335 million notes at 7.375% and five-year EUR600 million notes at 7.125% (one fifth of the euro bonds were bought by the EBRD), and in November – seven-year $500 million notes at 7.625%.

Naftogaz offered to pay all coupons on eurobonds 2022 and 2024 on July 19, 2024 and to redeem eurobonds 2022 on the same day, and would like to pay coupons on eurobonds 2026 on November 8, 2024.