Aequo acted as legal adviser to NJSC Naftogaz of Ukraine on the large-scale restructuring of Eurobonds worth approximately EUR 1.2 billion
Aequo acted as Ukrainian legal counsel to National Joint Stock Company "Naftogaz of Ukraine" in connection with the successful completion of the restructuring of two series of Eurobonds with a total outstanding value of approximately EUR 1.2 billion ($1.4 billion). The Aequo team worked alongside Norton Rose Fulbright, acting as Naftogaz’s international legal adviser, as well as Rothschild & Cie and Finpoint, acting as Naftogaz’s financial advisers.
The successful implementation of this transaction is one of the key steps in ensuring the financial stability of Naftogaz Group and the Ukrainian energy sector amid the full-scale war. The transaction covered outstanding Euro- and US dollar-denominated bonds issued through the special purpose vehicle Kondor Finance plc. The agreed terms of the restructuring allowed Naftogaz greater flexibility to allocate resources toward restoring critical infrastructure damaged by more than 250 hostile attacks since the beginning of the year, as well as maintaining stable preparations for upcoming heating seasons and accumulating sufficient gas reserves.
The restructuring process was carried out in two stages: an agreement in principle was first reached with the ad hoc group of international investors, followed by an official consent solicitation process covering all bondholders. Thanks to well-balanced commercial and legal terms, the proposal received unprecedented support, being approved by more than 90% of bondholders of each series. As a result, the maturity of the euro-denominated bonds was extended to 2032, and the US dollar-denominated bonds to 2033.
Legal support for the project required comprehensive expertise at the intersection of corporate finance, debt restructuring, and martial law financial regulations. Aequo’s team provided full support to the client on all aspects of Ukrainian law, including analysis of regulatory requirements, alignment of terms with state authorities, and drafting, in coordination with Norton Rose Fulbright, of the necessary transaction documentation.
The Aequo banking and finance team and capital markets team was led by Executive Partner Yulia Kyrpa and Counsel Oleg Krainsky. The working group included Senior Associates Dmytro Shudrenko and Yevheniia Chernetsova, and Associates Konstantyn Dovhan, Sofia Voloshanivska, Daryna Zhuravel, and Maria Melnyk. Tax advice was provided by Executive Partner Denys Lysenko and Counsel Vasyl Mishchenko.
“The successful restructuring of Naftogaz’s Eurobonds sets a landmark precedent for future Ukrainian cross-border financing and liability management transactions. It reflects not only the strong confidence of international investors and financial institutions in Naftogaz and Ukraine, but also the exceptional coordination and cooperation achieved across multiple Ukrainian Government authorities, enabling the company to deliver one of the most significant financial transactions since the beginning of the full-scale invasion. Beyond its financial dimension, this restructuring has a profound strategic importance. By extending the company’s debt maturities and preserving liquidity, it allows Naftogaz to direct substantial financial resources towards restoring and protecting Ukraine’s energy infrastructure destroyed by Russia’s ongoing attacks, rather than servicing debt in the midst of the war. In doing so, the transaction strengthens the resilience of Ukraine’s energy system, enhances the country’s energy security, and makes a tangible contribution to Ukraine’s ability to prevail on the energy front”, commented Yulia Kyrpa, Executive Partner at Aequo.