Ukraine's Naftogaz strikes preliminary deal to restructure $1.4 billion of bonds
Naftogaz Bond Restructuring Amid Ongoing Conflict
By Jekaterina Golubkova and Pavel Polityuk
June 10 (Reuters) - Ukrainian state energy firm Naftogaz has struck a preliminary agreement to restructure €1.2 billion ($1.4 billion) of its bonds that had been due next month and in 2028, as the Russian war continues to damage its infrastructure.
Details of the Bond Restructuring
The maturities - or final payment dates - of a €695 million ($802 million) bond due on July 19, and another $584 million due on November 8, 2028, are to be extended to January 2032 and January 2033 respectively, subject to approvals.
CEO Statement on Restructuring
"The successful completion of the restructuring will give us greater flexibility to direct resources toward restoring infrastructure and preparing for the (winter) heating season," Chief Executive Sergii Koretskyi said in a statement.
Impact of Russian Attacks on Ukraine’s Energy Sector
Russia has ramped up the intensity and scale of its attacks on Ukraine’s energy sector over the last 18 months, extensively targeting both power generation and gas facilities.
Damage Assessment and Company Response
Koretskyi said 229 strikes were carried out on the company’s assets in 2025 - more than in the previous three years combined - and that more than 170 attacks have already been recorded this year.
Approval Process and Market Reaction
The "agreement in principle" on the €1.2 billion debt rework is subject to final corporate and governmental approvals, the company said in its statement late on Tuesday.
It is expected to go swiftly through. The €695 million July 19 bond surged 4.3 cents on the euro on Wednesday in its biggest single-day leap in over two years, while the 2028 bond jumped more than 3 cents on the dollar.
Gas Production and Import Trends
Pre-War Gas Production
Before the war with Russia, Ukraine met almost all of its gas needs through domestic production, with facilities located in the central Poltava region and in the northeastern Kharkiv region, which borders Russia.
Recent Production Decline
Naftogaz has said its gas production decreased to 13.3 billion cubic metres in 2025 from 14.7 bcm in 2024.
Increased Gas Imports
"We are forced to offset losses in domestic gas production with imports," Koretskyi noted.
Naftogaz imported about 5.7 bcm of gas in 2025 "to ensure the sustainable passage of the 2025-2026 heating season", the company has said. It gave no data for gas imports in 2024.
Seasonal Gas Storage Requirements
Ukraine traditionally buys gas in spring and summer for the autumn and winter heating season, which begins in October-November.
The energy ministry has said the country should have at least 13 bcm of gas in storage by the start of the heating season.
($1 = 0.8669 euros)
(Reporting by Jekaterīna Golubkova in Tokyo, Pavel Polityuk in Kyiv and Marc Jones in London. Editing by Rashmi Aich, Louise Heavens and Mark Potter)
