Guaranteed Buyer confirms delay of settlement with DTEK Renewables

State company Guaranteed Buyer (GarPok) confirmed on
Nov. 16 that it had not paid UAH 3.0 bln out of UAH 19.3 bln to renewable
energy producers as a settlement of arrears for 2020-2021. Recall, Ukrenergo
(NPCUKR) placed a Eurobond for USD 825 mln in early November and directed part
of the proceeds, UAH 19.3 bln, to GarPok last week to enable it to decrease its
payables with green energy producers. On Nov. 15, DTEK Renewables (DTEREN), the
biggest producer of renewable energy in Ukraine, reported that it was the only company
that had not received any payment related to the Ukrenergo bond.

Explaining the delay on Nov. 16, GarPok stated that on
Nov. 15, the new director of the company ordered the bank to stop the money
transfers to green producers and return the funds that had not been transferred
to GarPok. As a result, the bank transferred back UAH 3.04 bln. GarPok also
stated that the Cabinet had initiated the creation of a working group to
investigate the activity of the previous director of GarPok (who was fired last
weekend). Based on the results of the investigation, GarPok will perform the
settlement of the money received from the Ukrenergo bonds, the company assured.

Responding to the GarPok statement, DTEK group called
the issue “manual intervention” and “an artificial delay of funds.” DTEK found
there “signs of illegal activity and abuse of office” by GarPok, Oschadbank
(OSCHAD) and “those senior government officials who issued the relevant illegal
orders.” It claimed, “further delays will be seen as increasing political and
financial pressure on the business” and stated that it is preparing claims for
its rights protection and compensation of damages.

Alexander Paraschiy: The
explanation of GarPok is strange: there is hardly any need to stop any payments
to green producers, which should be made on a pro-rata basis to all green
energy sellers. At first glance, the fact of providing the explanation is
encouraging. At the same time, GarPok’s statement does not imply that DTEK
Renewables can count on the repayment of the UAH 3.04 bln any time soon – the
explanation only transfers the responsibility for the delay from GarPok to the
Cabinet and some “working group” created by it.

For DTEK Renewables, the quick receipt of this payment
is not critical. The main thing is that the company is not being discriminated
against by GarPok in its other payments to renewable energy producers. DTEK’s
response to the issue is fully in line with our expectation that the holding
would seek compensation for possible damages.