In the spotlight: debt-restructuring talks at Naftogaz
'Naftogaz debt talks won't hit gas flow'
Naftogaz's debt restructuring talks will not hit the transit of Russian gas to Europe nor will it affect Kiev's payments for gas supplies, the Ukrainian state energy company said today.
"The process of debt restructuring will have no effect on Ukraine's payments to Gazprom, domestic prices for consumers, or the stability of the transit of Russian gas to Europe," Naftogaz spokesman Valentyn Zemlyansky told Reuters.
Meanwhile, Naftogaz confirmed it had not repaid a $500 million Eurobond by its maturity deadline, causing rating agency Fitch to downgrade it to restricted default.
The company, seen by foreign investors as a symbol of Ukraine's stumbling fortunes, has been in talks with bondholders to restructure its entire foreign debt by swapping it for a new five-year bond worth $1.65 billion with a 9.5% coupon.
Naftogaz has been at the centre of several gas price rows between Ukraine and Russia, the last of which in January this year led to Russian gas supplies being cut to thousands of consumers in southern Europe.
The company confirmed it had paid out a regular coupon on the bond - a move it hoped would pave the way for smooth restructuring talks. Several bond holders reacted positively to the proposal.
"The principal on the Eurobonds remains subject to a consent to exchange 100% of the bonds for new US dollar-denominated bonds ... which will benefit from an irrevocable and unconditional sovereign guarantee from the government of Ukraine," it said in a statement.
"Naftogaz of Ukraine continues to believe that the best course for bondholders is to review the proposal and carefully consider the terms of the offer," Naftogaz said.