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Update on Ukrenergo Bondholders

In a recent statement, the Ad Hoc Group representing significant holders of the Notes issued by Ukrenergo provided critical updates regarding the ongoing payment issues and negotiations surrounding these financial instruments. The Notes in question amount to $825 million, with a 6.875% interest rate, maturing in 2028. The context of this communication revolves around the company's recent failure to make scheduled interest payments.

On November 6, 2024, Ukrenergo announced a suspension of payments on the Notes, which included the important interest payment due on November 9, 2024. This suspension immediately drew attention, as it marked a significant moment for bondholders who had already faced adversity in the past. According to the Ad Hoc Group’s statement, the company has not opted to capitalize on the four interest payments that were deferred during its previous debt deferral efforts back in 2022.

As a result, the outstanding interest as of the latest update now exceeds $151 million, comprised of about $123 million in deferred coupons from earlier agreements and approximately $28 million due from the recent due date. Notably, these amounts had been previously conceded by the bondholders, highlighting the complex relationships and negotiations inherent in such financial dealings.

The Ad Hoc Group is keen to clarify that they require the full and timely discharge of all accrued and unpaid interest as a prerequisite for any potential arrangements dealing with the Notes. They emphasize that this stance is aligned with how the company has been servicing its other debts and commercial obligations, pointing to a perceived unevenness in the treatment of different classes of debt.

Moreover, the Ad Hoc Group expressed their concerns regarding the lack of engagement from Ukrenergo and its guarantor in terms of discussing potential restructuring options. They noted that since the default under the Notes, there have been no discussions with the concerned parties, a situation the Group attributes solely to the company's inaction.

To gain further insights or seek clarity, holders of the Notes are encouraged to reach out directly to representatives from Cleary Gottlieb Steen & Hamilton LLP. The firm is actively facilitating communications and may provide pertinent information regarding the evolving situation and potential next steps for bondholders.

As these discussions progress, the Ad Hoc Group remains steadfast, reserving all rights to protect their interests amidst what has become a fraught financial environment for Ukrenergo. Stakeholders are advised to keep a close eye on developments in this regard as the bondholder meetings and ongoing negotiations unfold, which could have lasting impacts on the financial health of the company and its capital markets strategies moving forward.