NJSC Naftogaz Ukrainy announced it has received the necessary approval from the Cabinet of Ministers for the completion of the transaction by the holders of Naftogaz eurobonds with an initial maturity in 2024 to defer payments on them for two years.

"Therefore, the 2024 bond offers have now been implemented," the company said on the Irish Exchange.

According to the report, Naftogaz, together with the Cabinet of Ministers as the sole shareholder and the Ministry of Finance, continues to consider the next steps in relation to 2022 and 2026 eurobonds, the holders of which did not agree to the proposal to defer payments.

"Additional information will be communicated to bondholders when it is possible and in accordance with the regulatory requirements of Naftogaz," the report says.

As reported, the holders of the 2024 eurobond issue of NJSC Naftogaz Ukrainy at the end of August approved the second proposal to defer payments on them. The quorum for the 2024 issue was 56.61% of the total number of participants, Naftogaz's proposal for a deferral was supported by 77.24% of the votes, largely due to the presence of the EBRD among the holders.

The company may now pay the body of the debt of EUR 600 million in 2026 rather than in 2024, and will start paying interest on it in 2024. The amount of interest deferred during 2022-2024 will total EUR 90 million at EUR 45 million per annum, due in July of each year.

Only 43.13% of the votes were cast in support of the proposal to defer payments on the 2026 eurobonds, and only around 22% of the votes on the 2022 issue.

Naftogaz argued the proposal to defer payments as needing to accumulate additional natural gas reserves for the upcoming heating season, which requires about $8 billion, according to the decision of the Ukrainian government.

All three issues of Naftogaz's eurobonds were placed in 2019: in July, the three-year one for $335 million at 7.375% and the five-year one for EUR600 million at 7.125%. The EBRD bought one fifth of the eurobonds; and in November, the seven-year one for $500 million with a yield of 7.625%. The 2022 eurobonds and interest payments on them and the 2024 eurobonds mature on July 19.