28th Apr 2025 15:10
28 April 2025
Press Release - For Immediate Release
Kyiv, Ukraine: PJSC "National Power Company "Ukrenergo" ("Ukrenergo") is pleased to announce that it has agreed terms for a liability management exercise in relation to its outstanding $825 million 6.875 per cent. Guaranteed Sustainability-Linked Green Notes due 2028 (the "Notes") with an ad hoc group representing approximately 40% of the outstanding Notes (the "Ad Hoc Group") and holders outside the Ad Hoc Group who, together with the Ad Hoc Group, represent in excess of 45% of the outstanding Notes.
The liability management exercise, which is expected to be completed by early July 2025, will consist of an offer to holders of the Notes to participate in a cash tender offer (the "Tender Offer") and/or an exchange offer for new Ukrenergo debt securities (the "Exchange Offer") as follows:
- Tender Offer Option:
o US$430 million to be raised in the international capital markets pursuant to a DFI-backed financing to be used by Ukrenergo to finance a tender for the Notes through an unmodified reverse Dutch auction process with a ceiling price equivalent to 65.125% of principal and accrued and past due interest as at closing.
o To the extent the Tender Offer is oversubscribed, Notes tendered at the cut-off price will be accepted on a pro rata basis. Any Notes tendered but not accepted into the Tender Offer will be reallocated to the Exchange Offer.
- Exchange Offer Option:
o Holders will be offered to exchange Notes for new unguaranteed notes due 2031 issued by Ukrenergo with 8.5% coupon and a semi-annual amortization schedule from June 2028 to December 2031 ("New Notes").
o Holders of the Notes who voluntarily exchange will receive $1 in principal amount of New Notes for each $1 in principal amount of the Notes and accrued and past due interest on the Notes (subject to the reallocation mechanism described below if the Tender Offer is not fully subscribed).
o Subject to the application of the reallocation mechanism described below if the Tender Offer is not fully subscribed, any Notes not voluntarily tendered pursuant to the Tender Offer or not voluntarily exchanged pursuant to the Exchange Offer will be exchanged for New Notes, with holders receiving $0.80 in principal amount of New Notes for each $1 in principal amount of the Notes and accrued and past due interest accrued on the Notes.
- Reallocation Mechanism:
o To the extent the Tender Offer is not fully subscribed, remaining cash shall be applied:
§ First, to repurchase a pro rata portion of the principal amount of any Notes not voluntarily tendered or exchanged, at a price equivalent to 60% of principal and accrued and past due interest as at closing; and
§ Second, to the extent necessary to fully apply the full US$430 million of cash available for the Tender Offer, to repurchase a pro rata portion of the principal amount of Notes whose holders voluntarily elected to participate in the Exchange Offer at the lesser of: (a) 68.7% of principal and accrued and past due interest as at closing, and (b) a price which yields an all-in average repurchase price for Ukrenergo (taking into account voluntary tenders and the repurchase of Notes not voluntarily tendered or exchanged as provided above) of 67.125% of principal and accrued and past due interest as at closing.
In addition, every holder participating in the Tender Offer or Exchange Offer will be deemed to vote in a consent solicitation (the "Consent Solicitation") approving certain amendments to the Notes and the sovereign guarantee. Successful completion of the Consent Solicitation is a pre-condition to completion of the DFI-backed financing for the Tender Offer, and hence the Tender Offer and Exchange Offer will not proceed unless the amendments contemplated by the Consent Solicitation are adopted by the requisite percentage of holders of the Notes.
More detailed terms of the Consent Solicitation, the Tender Offer and the Exchange Offer are set out at Annex A to this press release.
Oleksii Brekht, Acting Charmain of the Management Board of Ukrenergo, said:
I am very pleased that an agreement has been reached on a voluntary, mutually beneficial restructuring of the Notes. I wish to thank the Ad Hoc Group and VR Capital, in particular, for constructive engagement and achieved compromise. I call upon holders of the Notes to support the upcoming liability management exercise. The restructuring of the company's Notes shall allow the company to prioritize critically important reconstruction and recovery efforts to make Ukraine's power grid more resilient and robust.
Richard Deitz, President of VR Capital Group (a member of the Ad Hoc Group), said:
The terms reached represent a balance between the legitimate commercial expectations of the holders of Ukrenergo's Notes and the needs of Ukrenergo to carry out the capital expenditures necessary to continue to provide its critical services throughout Ukraine. The terms are the product of extensive, good-faith negotiations between Ukrenergo and the Ad Hoc Group. The Ad Hoc Group believes that the terms agreed warrant broad Noteholder support and looks forward to a successful outcome to the consent solicitation.
Ukrenergo is advised by White & Case LLP and Rothschild & Co and the Ad Hoc Group is advised by Cleary Gottlieb Steen & Hamilton LLP.
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This announcement is made by Ukrenergo and constitutes a public disclosure of inside information under Regulation (EU) 596/2014 (16 April 2014).
Annex A
PJSC "NATIONAL POWER COMPANY "UKRENERGO" INDICATIVE HIGH LEVEL TERM SHEET
28 April 2025
This indicative high level term sheet (this "Term Sheet") sets forth certain of the principal terms and conditions of a potential transaction (the "Transaction") relating to the $825 million 6.875 per cent. Guaranteed Sustainability-Linked Green Notes due 2028 (the "Notes") issued by PJSC "National Power Company "Ukrenergo" (the "Company" or "Ukrenergo").
This Term Sheet sets out high level key terms and conditions of the Transaction. It does not purport to summarise all terms of the Transaction. This Term Sheet shall not create, nor shall be deemed to create, a legally binding or enforceable offer or contract, shall not constitute a commitment to provide any funding, investment, enter into any agreement or establish any relationship between the parties.
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Tender Offer | The holders will be offered to participate in the Tender Offer and/or in the Exchange Offer. Every holder participating in the Tender Offer or Exchange Offer will be deemed to vote in a consent solicitation for the amendments to the Notes and the sovereign guarantee[1] which are a pre-condition to obtain the Available Cash.
$430,000,000 proposed to be raised by Ukrenergo pursuant to DFI backed financing (the "Available Cash") to be used to tender for the Notes through an unmodified reverse Dutch auction process[2] with a ceiling price equivalent to 65.125% of principal and Accrued and Past Due Interest (the "Ceiling Price").[3]
This cash component is contingent on the completion of a separate financing transaction by Ukrenergo, which Ukrenergo is reasonably confident can be completed if holders of Existing Notes agree to the proposed terms of the Transaction set forth herein.
To the extent that the Tender Offer is oversubscribed:
(a) Notes tendered at the highest price at which Notes are accepted for tender (the "Cut-off Price") will be accepted for tender on a pro rata basis; and (b) any Notes not accepted for tender, either at or above the Cut-Off Price, will be exchanged in accordance with the terms of the Exchange Offer on the same terms as Notes that have been voluntarily exchanged.
Each holder of the ad hoc group of holders of the Notes represented by Cleary Gottlieb Steen & Hamilton LLP ("Cleary") (each holder being, an "AHG Holder") irrevocably commits, on terms to be set out in an agreement between the Company and the AHG Holders, on a several basis, within the next 10 weeks of the date of this term sheet, to participate in the Tender Offer with bidding prices at or below the Ceiling Price or in the Exchange Offer on the terms described below, including the Exchanged Bonds Cash Allocation Mechanism.
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Exchange Offer | In conjunction with the option to participate in the Tender Offer, and subject to application of the Exchanged Bonds Cash Allocation Mechanism (described further below), holders will be offered to exchange the Notes (together with all the Accrued and Past Due Interest as at the settlement date of the Exchange Offer (or if the settlement date occurs after 1 July 2025, as at 1 July 2025)) for new unguaranteed notes issued by the Company on terms to be agreed, including as follows: · 8.5% coupon payable semi-annually on 1 June and 1 December of each year until maturity, there will be short first coupon for the interest period starting from the earlier of (i) the issue date of the New Notes (as defined below) and (ii) 1 July 2025 to but excluding 1 December 2025[4]; and · linear semi-annual amortization starting in June 2028 and final maturity in December 2031: o June 2028: $10 per $100 of the initial principal amount; o December 2028: $10 per $100 of the initial principal amount; o June 2029: $10 per $100 of the initial principal amount; o December 2029: $10 per $100 of the initial principal amount; o June 2030: $15 per $100 of the initial principal amount; o December 2030: $15 per $100 of the initial principal amount; o June 2031: $15 per $100 of the initial principal amount; and o December 2031: $15 per $100 of the initial principal amount, ("New Notes"). Subject to application of the Cash Allocation Mechanisms (described further below), holders who voluntarily elect to participate in the Exchange Offer shall receive $1 in principal amount of New Notes for each $1 in principal amount of the Notes and Accrued and Past Due Interest accrued on the Notes on the settlement date of the Exchange Offer (or if the settlement date occurs after 1 July 2025, on 1 July 2025).
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Compulsory Cash Allocation Mechanisms and Mandatory Exchange Mechanism | To the extent the Tender Offer is not taken-up to an amount of $430,000,000 and therefore any part of the Available Cash remains available after repurchase of the tendered Notes, the remaining portion of the Available Cash shall be applied to repurchase a pro rata portion of the principal amount of Notes which were not voluntarily tendered or voluntarily exchanged by the Holders with the repurchase being effected at the price equivalent to 60% of principal and Accrued and Past Due Interest (the "Non Participating Holder Cash Allocation Mechanism").
To the extent that, following the use of the Non Participating Holder Cash Allocation Mechanism, $430,000,000 has not been used, the balance of Available Cash shall be applied to repurchase a pro rata portion of the principal amount of Notes which holders voluntarily elected to exchange into the New Notes pursuant to the Exchange Offer at the Rollover Price (as defined below) such that the Available Cash is fully used (the "Exchanged Bonds Cash Allocation Mechanism"). Holders will receive the New Notes as per Exchange Offer terms in relation to the non-repurchased part of their Notes.
"Rollover Price" means the lesser of:
(a) 68.7% of principal and Accrued and Past Due Interest; and (b) a price which will yield an all-in average repurchase price for Ukrenergo (taking into account the results of the Tender Offer and the Non Participating Holder Cash Allocation Mechanism) of 67.125% of principal and Accrued and Past Due Interest.
Subject to the application of the Non Participating Holder Cash Allocation Mechanism, Notes not voluntarily tendered or voluntarily exchanged, (together with all the Accrued and Past Due Interest as at the settlement date of the Exchange Offer (or if the settlement date occurs after 1 July 2025, on 1 July 2025)) to be mandatorily exchanged for the New Notes with the holders receiving an amount equal to $0.80 in principal amount of New Notes for each $1 in principal amount of the Notes and Accrued and Past Due Interest accrued on the Notes as at the settlement date of the Exchange Offer (or if the settlement date occurs after 1 July 2025, as at 1 July 2025) (the "Mandatory Exchange").
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Accrued and Past Due Interest | The Past Due Interest and any and all accrued and unpaid interest under the Notes.
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Past Due Interest | All interest (including, in the case of the interest payments deferred pursuant to the 2022 deferral, interest accrued on such deferred interest payments during the deferral period), which has become due and payable and which has not been paid.
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Consent Fee | Holders of the Notes that (i) validly tendered the Notes will receive $20 in cash for each $1,000 in principal amount of the Notes so tendered if the Exchanged Bonds Cash Allocation Mechanism is not used and $10 in cash for each $1,000 in principal amount of the Notes so tendered if the Exchanged Bonds Cash Allocation Mechanism is used or (ii) accepted to exchange the Notes into the New Notes will receive $10 in cash for each $1,000 in principal amount of the Notes so exchanged.
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AHG Work Fee | The ad hoc group of holders of the Notes represented by Cleary will be paid a work fee of $4,750,000. |
Legal Fees & Expenses | The Company will pay the fees and expenses of the legal advisors of the ad hoc group, including Cleary and applicable local counsel, in connection with the restructuring of the Notes.
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Implementation | The Transaction will be effected by way of a consent solicitation under the terms of the Notes requiring a "Single Series Extraordinary Resolution" to be adopted with the affirmative support of at least 75% of holders of Notes present at a quorate meeting (with quorum of not less than 66⅔ % in aggregate principal amount of the Notes outstanding), exchange offer and a tender offer.
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This press release does not constitute an offer of the new securities for sale in the United States, and the new securities (if issued) will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") or the securities laws of any state of the United States and they may not be offered or sold within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state or local securities laws. This press release does not constitute an offer of the new securities for sale, or the solicitation of an offer to buy any securities, in any state or other jurisdiction in which any offer, solicitation or sale (if made) would be unlawful. Any person considering making an investment decision relating to any securities must inform itself independently based solely on an offering memorandum to be provided to eligible investors in the future in connection with any such securities before taking any such investment decision.
This announcement is directed only to beneficial owners of the Notes who are (A) "qualified institutional buyers" within the meaning of Rule 144A under the Securities Act or (B) outside the United States in offshore transactions in compliance with Regulation S under the Securities Act, that may lawfully participate in the Transaction in compliance with applicable laws of applicable jurisdictions.
No offer of any kind is being made to any beneficial owner of Notes who does not meet the above criteria or any other beneficial owner located in a jurisdiction where the offer would not be permitted by law.
Forward-Looking Statements
All statements in this press release, other than statements of historical fact, are forward-looking statements. These statements are based on expectations and assumptions on the date of this press release and are subject to numerous risks and uncertainties which could cause actual results to differ materially from those described in the forward-looking statements. Risks and uncertainties include, but are not limited to, market conditions and factors over which Ukraine has no control. Ukraine assumes no obligation to update these forward-looking statements and does not intend to do so, unless otherwise required by law.
Notice to Investors in the European Economic Area and the United Kingdom
Notice to EEA retail investors. The announcement contained in this press release is not being directed to any retail investors in the European Economic Area ("EEA") or in the United Kingdom. As a result, no "offer" of new securities is being made to retail investors in the EEA or in the United Kingdom.
This announcement is only directed to beneficial owners of Notes who are (i) within a Member State of the European Economic Area if they are "qualified investors" as defined in Regulation (EU) 2017/1129 and (ii) within the United Kingdom they are "qualified investors" as defined in Regulation (EU) 2017/1129 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018, as amended ("EUWA").
The new securities are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the EEA. For these purposes, a "retail investor" means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, "MiFID II"); or (ii) a customer within the meaning of Directive (EU) 2016/97 (as amended), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II.
The new securities are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the United Kingdom. For these purposes, a "retail investor" means a person who is one (or more) of: (i) a retail client as defined in point (8) of Article 2 of Regulation (EU) No 2017/565 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018, as amended; and/or (ii) a customer within the meaning of the provisions of the Financial Services and Markets Act 2000 (the "FSMA") and any rules or regulations made under the FSMA to implement Directive (EU) 2016/97, where that customer would not qualify as a professional client, as defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014 as it forms part of UK domestic law by virtue of the EUWA.
Consequently no key information document required by Regulation (EU) No 1286/2014 (as amended, the "EU PRIIPs Regulation") or by Regulation (EU) No 1286/2014 as it forms part of UK domestic law by virtue of the EUWA (as amended, the "UK PRIIPS Regulation") for offering or selling the new securities or otherwise making them available to retail investors in the EEA or the United Kingdom has been prepared and therefore offering or selling the new securities or otherwise making them available to any retail investor in the EEA or the United Kingdom may be unlawful under the EU PRIIPs Regulation and the UK PRIIPs Regulation.
United Kingdom
For the purposes of section 21 of the Financial Services and Markets Act 2000, to the extent that this announcement constitutes an invitation or inducement to engage in investment activity, such communication falls within Article 34 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the "Financial Promotion Order"), being a non-real time communication communicated by and relating only to controlled investments issued, or to be issued, by Ukraine.
Other than with respect to distributions by Ukraine, this announcement is for distribution only to persons who (i) are outside the United Kingdom, (ii) have professional experience in matters relating to investments falling within Article 19(5) of the Financial Promotion Order, (iii) are persons falling within Article 49(2)(a) to (d) ("high net worth companies, unincorporated associations etc.") of the Financial Promotion Order, or (iv) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as "relevant persons"). This announcement is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which the announcement relates is available only to relevant persons and will be engaged in only with relevant persons.
[1] Which amendments will be subject to the approval of the AHG Holders (as defined below) in both form and substance (including, without limitation, as to the conditions relating to the effectiveness of the amendments to the sovereign guarantee).
[2] Each holder whose tender offer instruction is accepted receives the tender price specified in its own tender offer instruction, which may be higher or lower than the price paid to other holders whose tender offer instructions have also been accepted.
[3] Unless otherwise specified herein or agreed to by the AHG Holders, for the purposes of this term sheet, the amount of principal and Accrued and Past Due Interest is to be calculated as at the settlement date of the Tender Offer and Exchange Offer as the case may be. For illustrative purposes the amount of the Accrued and Past Due Interest on US$825 million principal as of 1 July 2025 is US$188.44 million.
[4] If the settlement date occurs after 1 July 2025, the Accrued and Past Due Interest accrued on the Notes shall be calculated as of 1 July 2025 for the purposes of determining the exchange ratio under the Exchange Offer.
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Ukrenergo.26 A