Ukrainian Railway to seek waivers for default on 9 7/8% notes due 2021

By Susanna Moon

Chicago, Sept. 19 – Ukrainian Railway is planning to ask for waivers to defaults that occurred under its $500 million 9 7/8% loan participation notes due 2021 issued by Shortline plc.

The defaults occurred because the company failed to restructure its debt by Sept. 14, according to a company notice.

As of Sept. 15, the company had failed to restructure $242.5 million of debt, including $69.4 million of debt incurred by Donetsk Railway and about $173.1 million that was incurred by the “original group” other than Donetsk Railway.

The company said it was unable to complete the restructuring on time because of delays obtaining government approval.

Ukrainian Railway said it is also a debtor to about $2.8 million of notes incurred by the original group, which it continues to pay interest on but that the principal amount is overdue. The company said it was unable to restructure the debt because the lender is the subject of bankruptcy proceedings.

The company also has loans of about $38.4 million originally incurred by Donetsk Railway, which is also overdue.

London-based Shortline said the notes were issued for the purpose of funding loans made to Ukrainian Railway.

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