December 04, 2017 | Cbonds
|DTEK Energy (DTEKUA) announced on Dec. 1 it acquired controlling stakes in three Ukrainian coal machinery companies on Nov. 30. The new assets include Druzhkivka Plant, Svitlo Shakhtaria Plant and the Mining Machines engineering center, all being a part of the SCM business group, the parent company for DTEK Energy.|
On top of that, the holding announced it will pay “full interest in cash to all of its bond creditors in the first quarter of 2018.” Based on the terms of DTEKUA Eurobonds, the holding may choose to pay coupons (10.75% rate) in cash (at least 5.50%) and in PIK (the rest) in 2017-2018.
Alexander Paraschiy: The consolidation of coal machinery assets under DTEK Energy is surprising news, given that over the last couple of years, the sub-holding was only spinning off assets (its natural gas production unit, green energy unit, Russia-based coal mine). So far, it is hard to say whether the consolidation of coal machinery assets is value-creative for DTEK Energy.
At the same time, DTEK’s decision to pay coupons fully in cash next time is encouraging – it clearly indicates the company is better off, which is supportive for further growth of the DTEKUA bond price.
Issue: DTEK, 10.75% 31dec2024, USD
|Status||Country of risk||Maturity (option)||Amount||Issue ratings (M/S&P/F)|
|Full company name||Donbass Fuel-Energy Company(DTEK)|
|Country of risk||Ukraine|
|Country of registration||Ukraine|