Home Economy Naftogaz of Ukraine declared default on Eurobonds

Naftogaz of Ukraine declared default on Eurobonds

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Naftogaz Ukrainy (Naftogaz) defaulted on Eurobonds after the deadline for payments to their holders expired. The company announced this on July 26 in its Telegram channel.

“The government went into default on Eurobonds of Naftogaz Ukrainy. Since the default on Eurobonds practically deprived Naftogaz of access to the international capital market, the government, by banning their payment, actually assumed full responsibility for raising the funds necessary to import natural gas for the 2022/2023 heating season,” the company said in a statement.

The Ukrainian government defaulted on Naftogaz’s Eurobonds, without giving the company’s management the opportunity to make payments to Eurobond holders to pay the principal (2022 issue) and interest (2024 issue), adds Gazeta.Ru.

On July 20, Naftogaz asked Kyiv for a subsidy of 150 million hryvnias (about $5 billion) to purchase gas for the heating season. The company emphasized that in order to resolve the issue of purchasing blue fuel, they need direct budget funding.

On the same day, the former speaker of the Verkhovna Rada, the former head of the ruling Servant of the People party, Dmitry Razumkov, said that Ukraine should take part of the Russian gas that goes through transit pipelines to the West. In his opinion, a paradoxical situation has developed for Kyiv, in which the Ukrainian side does not replenish its own storage facilities with the necessary amount of fuel, “daily pumping millions of cubic meters of Russian gas.”

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