Ukrzaliznytsia’s Debt Projected To Reduce By UAH 5 Billion In 2015 – Financial Plan

The financial plan of the State Railway Administration (Ukrzaliznytsia) for 2015 provides for obtaining loans totaling UAH 22.4 billion and repaying previous loans totaling UAH 27.8 billion.

According to the explanatory note to the financial plan, Ukrzaliznytsia’s financial liabilities totaled UAH 42.8 billion (converted at the rate of 23.5 UAH/USD) as of 1 January 2015, and they are projected to total UAH 37.4 billion at the end of 2015, i.e. they are expected to reduce by UAH 5.3 billion, the Interfax Ukraine news agency writes.

"Long-term credits totaling UAH 7.9 billion are expected to be obtained in 2015, of which UAH 2 billion (including UAH 1.67 billion in capital investment and UAH 0.33 billion in VAT) will be spent on capital investments programs and UAH 5.9 billion on refinancing existing debt," the document states.

In addition, the draft financial plan provides for raising funds by placing long-term bonds worth UAH 4 billion.

"This amount is envisaged as one of the sources for financing the needs of the rail industry in terms of working capital and debt refinancing," the explanatory note to the document states.

It is also provides for obtaining short-term loans totaling UAH 10.5 billion and repaying loans totaling UAH 10.6 billion - mostly loans provided for up to one month and overdrafts intended for timely payment of wages and overcoming cash shortages.

"Because railways temporarily experience an acute shortage of working capital during periods of payment of salaries and payments into the budget, this right to obtain short-term loans/overdrafts to ensure timely payment of wages and settlements with the budget in accordance with the active law will help to stabilize social tensions in the railway industry. Thus, the short-term loan portfolio at the end of 2015 is planned at zero," the document states.

Ukrzaliznytsia does not plan to raise funds for purchase of fixed assets through the financial leasing mechanism in 2015. Payments of debts on finance leases will amount to UAH 0.4 billion in 2015. Debts on finance leases will total UAH 0.3 billion at the end of 2015.

As Ukrainian News earlier 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.