Creditor Response to the Presentation and Proposal of Naftogaz

US $335,000,000 7.375% LOAN PARTICIPATION NOTES DUE 2022 (ISIN: XS2027393938); EUR 600,000,000 7.125% LOAN PARTICIPATION NOTES DUE 2026 (ISIN: XS2027394233); and  US $500,000,000 7.625% LOAN PARTICIPATION NOTES DUE 2026 (REG S ISIN: XS2077601610; RULE 144A ISIN: US50050MAB19) (THE "26 NOTES") EACH ISSUED BY KONDOR FINANCE PLC (TOGETHER, THE "NOTES")

LONDON, March 10, 2023 /PRNewswire/ -- Certain holders of Notes advised by Cleary Gottlieb Steen & Hamilton LLP (the "Noteholder Group") wish to respond to the new "working scenario" (the "New Proposal") put forward by National Joint Stock Company "Naftogaz of Ukraine" (the "Company") on 10 March 2023.

As an initial matter, the Noteholder Group notes that the New Proposal is not a product of bilateral discussions between the Company and the Noteholder Group.¹  Regrettably, the Company has chosen once again to eschew the time-honored market practice of engaging in good-faith negotiations with creditor representatives, and has instead put forth a proposal largely devoid of creditor input.  Moreover, the Company thus far has declined to provide its creditors with financial information to enable a considered review and discussion of appropriate adjustments to the contractual terms of the Notes.

The Noteholder Group reiterates – and believes it speaks for the entire Noteholder body in communicating – its full support and commitment to Ukraine, and Ukraine's brave and steadfast efforts to defend its freedom and territorial integrity in the wake of the Russian invasion.  At the same time, the Noteholder Group also believes that upholding and honouring commercial relationships to the fullest extent possible under the current circumstances is the best way to ensure (i) the long-term continuity of capital markets funding for Ukrainian borrowers and (ii) that Ukraine's economy adjusts as rapidly as possible to new circumstances. 

The Noteholder Group does not believe the New Proposal represents appropriate terms on which it could support a restructuring of the Notes.  The Noteholder Group respectfully calls on the Company to engage in a good-faith, two-way dialogue with Noteholders without pre-conditions in order to find a consensual path forward which can address all appropriate needs of the Company.  The Noteholder Group reiterates its willingness to engage in such discussions.

Noteholders are invited to contact Solomon J. Noh, Alastair Goldrein, James Armshaw or Jonathan Griggs of Cleary Gottlieb Steen & Hamilton LLP for further information.

The contact details for Messrs. Noh, Goldrein, Armshaw and Griggs appear below:

¹ The Company's assertion that the Restructuring Proposal is a product of discussions with a "26 group" is misleading.  The Noteholder Group includes (and is also in regular contact with) holders of the 26 Notes who represent a large percentage of the total outstanding amount of those Notes, and who were unaware of, and did not take part in, such discussions.

SOURCE National Joint Stock Company “Naftogaz of Ukraine”