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Concorde Capital Research: DTEK completes restructuring of USD 1 bln banking debt

March 31, 2017 | Cbonds

Ukraine’s leading coal and utility holding DTEK Energy (DTEKUA) reported on March 29 it has entered into a long-term restructuring of its banking debt. The concluded agreement amends the terms of the vast majority of the holding’s bank facilities, the company said, reporting no exact value of its debt to banks. Concorde Capital estimates its value at about USD 1.0-1.1 bln.

According to the deal, DTEK will repay USD 60 mln of mentioned debt in 2017, USD 40 mln in 2018, USD 80 mln in each of the years 2019-2022. It will fully repay the rest of debt by the end of June 2023. The interest rate on the new debt facility will be LIBOR/EURIBOR + 5%. DTEK will pay interest in cash and PIK, with the cash portion being 51% in 2017-2018, 60% in 2019, 70% in 2020, 79% in 2021 and 88% afterwards.

Alexander Paraschiy: Based on such restructuring parameters, DTEK Energy will have to generate USD 150 mln in free cash flow to be able to smoothly service all its debt this year. That would be a challenging task, in our view, but not impossible. Much will depend on DTEK limiting its CapEx appetites way below the cap of USD 475 mln (let’s say, to USD 300 mln) and its ability to ensure that the power sector regulator is approving a “reasonably high” rate for electricity its power plant will produce. As possibility of good power rates is high, we remain neutral on DTEKUA Eurobonds, with a certain degree of optimism.

Company: DTEK

Full company nameDonbass Fuel-Energy Company(DTEK)
Country of riskUkraine
Country of registrationUkraine


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