Naftogaz bondholders approve only partial restructuring

Ukraine's state-owned gas company Naftogaz remained stuck in default after a proposal to push back debt payments for two years due to the war with Russia only secured the backing of holders of one of the bonds at stake on Wednesday.

Ukraine's state-owned gas company Naftogaz remained stuck in default after a proposal to push back debt payments for two years due to the war with Russia only secured the backing of holders of one of the bonds at stake on Wednesday. Naftogaz said holders of its 2024 bonds had agreed for it to push back payments but those of its 2026 paper had not.

Holders of its other main bond which should have been fully repaid this year had already rejected a proposal earlier this month. Naftogaz, which accounted for almost 17% of Ukraine's total state budget revenue last year, has been in default since it missed nearly $1 billion worth of debt payments last month.

Results of an already-extended vote showed that 77% of its 2024 bondholders who submitted votes backed the plan, but only 43% of participating 2026 bondholders did so, well short of the 75% required. "Naftogaz is considering next steps in respect of the 2022 Notes and the 2026 Notes, together with the Cabinet of Ministers of Ukraine as sole shareholder and the Ministry of Finance," Naftogaz's management said in a statement alongside the regulatory filing of the results.

Naftogaz remains under an order that prohibits the company making any debt-related payments without the approval of the cabinet of ministers.