KYIV – State-owned Ukrainian Railways has struck a deal to delay payments on $895 million of Eurobonds, Deputy Prime Minister Oleksandr Kubrakov said on Friday, part of a broader effort by the Ukrainian government this year that has saved billions.
“Ukrzaliznytsia finalised negotiations with bond holders on restructuring $895 million bonds. Payments will be postponed for 2 years,” Kubrakov said on his Twitter account.
He added the decision, which he said was backed by the government and finance ministry with investment banks JP Morgan and Dragon Capital acting as advisers, “will secure stable passenger and cargo transportation”.
The company, a key player in the country’s economy and labour market, has deferred debt payments on U.S. dollar denominated bonds worth $594.9 million maturing in July 2024 and on $300 million notes maturing in July 2026.
The company will pay investors a fee for their consent, Interfax-Ukraine news agency reported.
The Ukrainian government restructured all its Eurobonds earlier this year, leading to nearly $6 billion in savings on payments through 2024.
Battered by Russia’s invasion, Ukraine expects its economy to contract by over 30% this year.
Ukrainian Railways is a key means of transportation for both humanitarian aid and exports as Black Sea transport routes have not been fully unblocked.
The Fitch ratings agency downgraded Ukrainian Railways to ‘C’ from ‘CC’ earlier this month.