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29.12.2016

JSC “Ukrzaliznytsia” and JSB “Ukrgasbank” have executed a loan agreement on the amount of UAH 4 bln

JSC “Ukrzaliznytsia” (hereunder – “Ukrzaliznytsia” or “Company”) informs, that performed operation concerned to attract financing from one of the biggest state-owned banks Joint Stock Bank “Ukrgasbank” (hereunder – “Ukrgasbank”) has been successfully completed by execution of the relevant loan agreement on 27.12.2016.

Funding on the amount of UAH 4 billion for 5 years is aimed at restoration of productive partnership, which has previously existed between the companies.

And though the issue of the overdue financial debt restructuring, which has been previously arisen from Ukrainian Railways (as state enterprises) obligations, will be finally reconciled between Bank (as Lender) and Ukrzaliznytsia (as Borrower).

Implementation of the agreements between the management of Ukrzaliznytsia and Ukrgasbank concerned to the loan became possible foremost after adoption by the Cabinet of Ministers of Ukraine the Decree No. 551 dated 23.08.2016, which has simplified the mechanism of coordination UZ loan involvement. The Company initiated Decree effect prolongation for the next year.

Attracting of the loan from Ukrgasbank is one of the stages of Company’s local debt restructuring program, which has been introduced by the management board of UZ on 22 November 2016 during the meeting with bondholders in London.

Unlike terminable foreign currency loans, which actually consist the majority in the credit portfolio of UZ, the loan is structured as renewable UAH credit line and will allow to reduce costs for its servicing, to decrease currency risks and provide more efficient using of the account balance.

It should be mentioned, that this loan is a first involvement of loan funds since the establishment of the Company (in the end of 2015).

As for now, UZ continues working on improvement of loan portfolio structure, foremost through the collaboration with Ukrainian state-owned banks.