NJSC Naftogaz Ukrainy reports that it has the necessary amount in its accounts for the payment of eurobonds and is waiting for the government's response to a request to agree on this payment due to significant risks in case of refusal to pay it.

"In their applications to the government the national company informed that the company had funds for making the payments, as well as informed on potential risks for the company and the state in general in case of "hard default" (violation of payment obligations), which would occur if the state did not approve payments by Naftogaz to the bondholders," the company said in press release.

"Given that the proposal to defer the payments for the eurobonds, driven by the position of the government to use these funds for the import of natural gas, was not supported by the bondholders, the original terms of the bonds continue to apply. Naftogaz is therefore required to make relevant payments of principal and interest on July 26, 2022 (within the grace period specified)," it said

"On July 22, 2022 the financial director of Naftogaz and on July 23, 2022 the CEO of Naftogaz, in line with the relevant decision of the board, applied to the Cabinet of Ministers for approval of such payments in order to comply with the above decision of the government and also in order to comply with obligations of the national company in relation to eurobonds payments," the report says.

"At the time of publication of this press-release, Naftogaz did not receive approval of the government, and accordingly cannot transfer funds for payments to the bondholders," it reads.

"We note that in order to comply with the above decision of the government Naftogaz is currently preparing a new eurobonds consent solicitation transaction, which complies with the requirements of the government in full," the company said.