"The Group intends to continue its debt reduction strategy and is proposing the inclusion of additional issuer commitments to reduce debt," DTEK Energy stated in its consent solicitation published on the Irish Stock Exchange on Monday, for which it is offering bondholders a 1% consent fee based on the nominal value of their bonds.
DTEK Energy clarified that outstanding bonds currently amount to $930.91 million in nominal value, out of a total issuance of $1.46687 billion.
It is noted that despite the challenges and disruptions caused by the war in Ukraine, the Group has proactively reduced its nominal debt by about 47%, or $750 million, since the beginning of the war through a combination of semi-annual amortization payments of $8 million to $10 million every six months, a November 2022 bond buyback in accordance with the indenture, and voluntary Dutch auction buyback offers in December 2022, March 2023, and October 2023, along with other market purchases.
"As of the date of the Consent Solicitation, the Group's outstanding debt stands at approximately $931 million," the document states," the document says.
According to it, the ability to continue the declared debt reduction strategy depends on the current NBU restrictions, i.e. the ability of the holding's Ukrainian subsidiaries to provide the issuer, DTEK Energy B.V., with foreign currency in the required amounts.
As part of the offer to the Eurobond holders, the company will be obliged to reserve any unused amount of the annual $100 million debt reduction commitment in a separate account in Ukraine, with limited options to use those funds for short-term investments.
In addition, DTEK Energy proposes to amend its covenant package to enhance the company's investment attractiveness and improve its financial and operational flexibility for strategic investments, such as lifting restrictions on future business lines and raising thresholds for requiring an independent valuation and bondholders approvals.
According to it, bonds buybacks can be executed through tender offers or private transactions, in one or more tranches, and in case of a balance up to the NBU limit, it will be used for buybacks at par, together with a six-month amortisation of $10 million.
Bondholder responses will be accepted until May 26 this year.
