The State Railway Administration (Ukrzaliznytsia) has reached agreement in principle with the railway industry’s main creditors on restructuring about UAH 17 billion of domestic debt, which constitutes about 82% of the total domestic debt that is subject to restructuring, Ukrzaliznytsia announced in a press release, the UNIAN news agency reports.
According to the press release, the state-owned Ukrzaliznytsia plans to restructure a total of more than UAH 20 billion of domestic debt to private creditors.
The press release states that restructuring the debt is the first step in the process of debt restructuring and a prerequisite for maintaining financial stability in the sector.
"Resolution of this this issue will allow reduction of the debt burden, which, in turn, will provide an opportunity to promptly service the existing financial debt, promptly repay the loans that were obtained under state (government) guarantee, and ensure smooth operation of the industry and safe operation of trains," the press release said.
As the CFTS portal reported, Ukrzaliznytsia notified its creditors of a technical default on certain debt obligations on 12 May after it stopped making principal payments on certain domestic bilateral debt obligations and cross-defaulted on its Eurobonds.
Ukrzaliznytsia also announced plans to restructure UAH 32 billion out of its total debt of UAH 37.5 billion to private creditors. According to the Ukrzaliznytsia leadership, about UAH 22 billion of this amount is owed to domestic creditors.
Ukrzaliznytsia’s debt to official creditors, particularly the European Bank for Reconstruction and Development, and its debt to the Export-Import Bank of Korea under official bilateral loans are not subject to restructuring.
Infrastructure Minister Andrii Pyvovarskyi said in late June that he expected the negotiations on restructuring Ukrzaliznytsia’s domestic debts to be completed by September this year.
