Ukrenergo declares technical default on eurobond payments

Source: NEC Ukrenergo

NEC Ukrenergo announced its technical default on green eurobonds on Wedneday. It will stop payments starting November 9. The company assured it is a temporary measure adding that restructuring its debt can take several months.

“This technical decision will stand until we finalize debt restructuring, which is expected soon. Together with the Ukrainian government, Ukrenergo is taking all necessary steps to reach an agreement with bondholders as quickly as possible,” the company stated.

Ukrenergo said it has informed its partners and creditors of the temporary suspension, assuring them of the company’s operational and financial stability.

“We continue fulfilling our responsibilities under Ukrainian law and our charter, including preparing for winter, restoring infrastructure, and strengthening the resilience of Ukraine’s energy system under martial law,” the company said in its statement.

Ukrainian MP Yaroslav Zhelezniak said it happened as the company had no ‘functional’ Supervisory Board. “Ukrenergo declared a technical default, largely due to lacking a functional Supervisory Board. Once established, the company can complete restructuring. This situation arose because someone was eager to change management at any cost, ignoring the risks,” Zhelezniak noted.

The lawmaker believes things now look bleak for the company. “Even if the issue gets resolved, the default will cloud the future for  Ukrenergo and Ukraine. It means future borrowing for energy projects (and beyond) will be harder and more expensive. This outcome, driven by greed and shortsightedness, is unfortunate.”