Naftogaz’s Kondor starts solicitation to push payments to 2024

Chicago, July 12 – NJSC Naftogaz of Ukraine subsidiary Kondor Finance plc started a consent solicitation for three notes on Monday, according to an announcement.

The notes that are part of the solicitation are the:

• $335 million 7 3/8% loan participation notes due 2022 (ISIN: XS2027393938);

• €600 million 7 1/8% loan participation notes due 2024 (ISIN: XS2027394233); and

• $500 million 7 5/8% loan participation notes due 2026 (ISINs: XS2077601610, US50050MAB19).

Kondor is the issuer and Naftogaz is the borrower on the notes.

The borrower informed the issuer on July 4 that it was evaluating its liquidity and operating requirements in line with supporting Ukraine’s strategic priorities, including with a view to preserving available cash.

Naftogaz has been asked by the cabinet of ministers of Ukraine to ensure the availability of natural gas in storage facilities by Oct. 1, 2022 in an amount sufficient to meet the needs of household consumers and heat supply companies for the stable passage of the autumn-winter period of 2022/2023. The borrower therefore needs to purchase and import approximately $7.8 billion worth of natural gas. Additionally, Naftogaz has to provide the natural gas to consumers at set prices, sometimes lower than market rates.

Noteholders are being asked to approve an extraordinary resolution that would defer payment and/or interest on the three notes until 2024, waive any potential event of default or event of default and waive compliance with certain covenants in the issuer’s loan agreements until 2024.

Specifically for the 2022 notes, a principal payment and semiannual interest payments would be deferred to July 19, 2024 and the maturity date would be extended by two years.

For the 2024 notes, annual interest payments would be deferred to July 19, 2024.

For the 2026 notes, semiannual interest payments would be pushed until Nov. 8, 2024.

Any events of default or a relevant event would be waived as a result of the deferral of payments.

There is no consent payment in connection with the proposal.

The voting deadline is 11 a.m. ET on July 21, also the record date.

Meetings will be held at 5 a.m. ET on July 26.

A quorum is considered as at least two-thirds of the aggregate principal amount of notes. And, then votes in favor must come from a majority of at least 75% of votes cast.

The offer agent is Citigroup Global Markets Ltd. (liabilitymanagement.europe@citi.com).

The tabulation and information agent is Citibank, NA, London Branch (+44 20 7508 3867, citiexchanges@citi.com).

Naftogaz, an oil and gas company, is based in Kiev. Kondor Finance is based in the United Kingdom.

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