Naftogaz has revealed its bondholders are set to refuse its two-year debt payment freeze request.
The Ukrainian state-owned energy giant also hit out at the country’s government for rejecting another plan by the company to keep making its payments.
It said in a statement that with so few bondholders supporting its debt freeze proposal ahead of a deadline on Tuesday, the “required quorum” needed to pass the plan was “not expected to be met”.
Sparately, the Ukraine’s cabient rejected a request from Naftogaz to go ahead with a $335m principal and interest payment on a bond due last week, alongside a separate interest installment on another bond that runs up to 2024.
It also had submitted another request last weekend to approve the payments and was awaiting a response.
Meanwhile, Naftogaz expects to formulate a new proposal to try and win bondholders’ approval.
Last year, the energy giant accounted for almost 17 per cent of government revenues – an increasingly key source of funds for the country following Russia’s invasion and months of continued conflict.
If Naftogaz doesn’t manage to convince its bondholders to agree to a plan in the coming days it will likely become the first Ukrainian entity to fall into a full-blown default.
Ukraine’s government estimates it faces a fiscal deficit of roughly $5bn a month – or 2.5 per cent of pre-war GDP.
The EU’s financing arm, the European Investment Bank, has warned that the cost of rebuilding Ukraine could run into trillions of dollars.