Concorde Capital Research: Naftogaz warns slow reforms threatening USD 300 mln EBRD loan

July 11, 2017 - Украинские новости

 

Ukrainian natural gas monopoly Naftogaz reported on July 10 that the EBRD is concerned about the government's incomplete fulfilment of its commitments, which may lead to the freezing a USD 300 mln credit line to Naftogaz. In particular, Naftogaz said the EBRD expects that by the end of this month, the Cabinet will approve Naftogaz's 2017 financial plan and action plan of its supervisory board. The implementation of Naftogaz's restructuring plan, agreed upon with international donors, has been practically stopped, Andriy Kobolev, Naftogaz CEO, said on June 10.

The EBRD opened a USD 300 mln credit line to Naftogaz in October 2015 aimed at financing natural gas purchases. Last week, the bank approved a USD 66 mln tranche from this credit line.

Alexander Paraschiy: It is good that Naftogaz is able to use the EBRD to pressure the government to accelerate its restructuring and approve its 2017 financial plan. Such pressure should work, given that now it is high time to use the credit line to speed up accumulation of natural gas stockpiles for the heating season. Not all state companies are as fortunate. For instance, national railway operator Ukrzaliznytsia (RAILUA) is also waiting for the government to approve its annual plan, with fewer incentives for the Cabinet to hurry.
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Issuer: Naftogaz
Outstanding issues:
3 issuesUAH4,800,000,000
Issuer rating:
UCRAWithdrawn/National Rating Scale05/08/2015
Moody's Investors ServiceWithdrawn/LT- foreign currency03/12/2010
Fitch RatingsCCC/LT Int. Scale (foreign curr.)04/13/2017
Fitch RatingsCCC/LT Int. Scale (local curr.)04/13/2017
Credit-RatinguaA/StableNational Scale (Ukraine)08/22/2011
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