DTEK gets bondholder approval to sell Russian mines

Ukraine’s leading coal & power holding DTEK Energy (DTEKUA) reported on June 30 that 74.3% of its bondholders gave their consent in favor of the sale of the holding’s Russian assets. The minimum threshold was 25%. Following the consent, DTEK is free to complete the sale of its Russian coal mine and enrichment factory in exchange for a reduction of its debt by USD 436 mln, or 16.5%. The contribution of Russian assets to DTEK’s 2015 revenue and EBITDA was 2.7% and 15.3%, respectively.

Alexander Paraschiy: The news is fully expected, given that the deal is beneficial for its debt holders and the threshold to approve the deal was very low. The deal’s completion, if goes smoothly, will enable DTEK to concentrate on its restructuring negotiations with bondholders and complete them by the end of the standstill in late October. We reiterate our neutral view on DTEKUA bonds.