DTEK Energy finally completes debt restructuring

Ukraine’s leading coal and power holding DTEK Energy
(DTEKUA) has finalized the restructuring of its remaining debt facility, the
company reported on Nov. 18. Part of the debt has been converted into the
company’s Eurobonds maturing in 2024 and the other part was restructured.
According to the company’s 1H19 presentation, the amount of
yet-to-be-restructured debt was USD 207 mln, of which USD 100 mln is subject to
conversion into bonds and USD 107 mln is subject to change of debt conditions.

DTEK Energy initiated its debt restructuring in 2015,
when its ability to generate profit significantly deteriorated. As part of its
restructuring, the holding spun off its natural gas and renewable energy
businesses in 2015 and Russian coal mines in 2016, which enabled it to reduce
its debt from USD 3.0 bln as of end-2014 to USD 2.2 bln as of end-2016. Of the
remaining amount, the holding managed to restructure USD 1.9 bln in late 2016
and early 2017.

Alexander Paraschiy: After the
finalization of its debt restructuring, DTEK Energy should enjoy an upgrade of
its credit ratings, triggering an appreciation of DTEKUA bonds. This also opens
an opportunity for DTEK Energy to try to refinance its existing debt at cheaper
rates, which may result in calling the existing bond (at a predetermined call
price of 104.0% in 2020, 102.7% in 2021 and 100.0% since 2022).