DTEK Energy spins off Russian mines, USD 436 mln debt

Ukraine’s leading coal and power holding DTEK Energy (DTEKUA) is transferring its Russian mining assets along with USD 436 mln debt to a separate company outside its perimeter of consolidation, according to its Sept. 22 report. The Russian mine Obukhovskaya will be servicing this debt from its own cash flow, which will be restructured for five or ten years. This will enable the holding to reduce its total debt outstanding (which is subject to restructuring) by 17% to USD 2.2 bln.

DTEK’s bondholders agreed to spin off Obukhovskaya with the debt in late June, with 74% bondholder approval. The contribution of Russian assets to DTEK Energy’s 2015 revenue and EBITDA was 2.7% and 15.3%, respectively.

Alexander Paraschiy: The spinoff of Russian mines was an expected event, so we do not expect any market reaction to it. Meanwhile, we are still waiting for DTEK’s offer to bondholders to prolong a standstill period for at least three months from Oct. 28.