# Exclusive-Naftogaz CEO prepared to step down if it would facilitate debt deal
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-09-01
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Naftogaz CEO open to stepping down to restructure debt
Meta Description: Naftogaz CEO Yuriy Vitrenko is willing to resign to assist in debt restructuring following Russia's invasion, as creditors reject payment deferments.
URL: https://financedigest.com/exclusive-naftogaz-ceo-prepared-to-step-down-if-it-would-facilitate-debt-dealhtml

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By Andrea Shalal

KYIV (Reuters) – The head of state-run Ukranian energy company Naftogaz is ready to step down if it would help the business to restructure its debt in the wake of Russia’s invasion, he told Reuters on Wednesday.

CEO Yuriy Vitrenko’s position came under scrutiny last month after the Ukraine government openly criticised the company’s handling of the debt restructuring request, which appeared ill-coordinated with the government’s own request for a freeze in debt payments several weeks later.

Naftogoz [creditors have twice rejected the company’s request to defer debt](https://www.financedigest.com/sovereign-debtors-creditors-agree-on-steps-to-jumpstart-debt-restructurings.html "Sovereign debtors, creditors agree on steps to jumpstart debt restructurings") payments on 2022 bonds for two years in the wake of Russia’s invasion, leaving the energy giant in default.

On Wednesday, the [company said its creditors had approved a separate](https://www.financedigest.com/why-it-pays-for-companies-to-hold-physical-assets-in-separate-limited-companies.html "Why it pays for companies to hold physical assets in separate limited companies") proposal to defer payments for two years on 2024 bonds, while holders of 2026 bonds had rejected such an arrangement.

“Of course, for the good of the country … if it’s about that,” Vitrenko told Reuters when asked if he would step aside if it would help to convince [investors to back](https://www.financedigest.com/glencore-courts-120-teck-investors-for-bid-backing-as-spinoff-vote-looms-source.html "Glencore courts 120 Teck investors for bid backing as spinoff vote looms -source") a freeze in debt payments. “I’m not married to this seat.”

The [former investment banker said he realised his job had become “a hot seat” but said he had been in close contact with investors and had not heard “even a hint that a change of the CEO](https://www.financedigest.com/shareholder-group-iss-backs-barclays-board-over-former-ceo-staley.html "Shareholder group ISS backs Barclays board over former CEO Staley") would have any kind of influence” on their decisions.

[‘PUBLIC SERVICE](https://www.financedigest.com/the-new-fangled-normal-of-working-from-home-to-push-the-public-cloud-service-market.html "The “New-Fangled” Normal of “Working from Home” to Push the Public Cloud Service Market") OBLIGATIONS

He said investors understood that Naftogaz’s decision to seek a restructuring was made by the government, not the company, which had hoped to keep paying its [debt using a loan from the European Bank](https://www.financedigest.com/seven-out-of-ten-uk-adults-aged-25-44-never-seek-advice-on-dealing-with-debts-despite-depending-on-the-bank-of-mum-and-dad.html "Seven out of ten UK adults aged 25-44 never seek advice on dealing with debts despite depending on the bank of mum and dad") for Reconstruction and Development.

He said Kyiv insisted that Naftogaz also [seek a two-year freeze in payments because it worried that any move by the state-owned firm](https://www.financedigest.com/some-credit-suisse-at1-bondholders-seek-legal-advice-law-firms.html "Some Credit Suisse AT1 bondholders seek legal advice -law firms") to keep servicing its debts could hurt the government’s request for restructuring of almost $20 billion of its own international bonds.

It was not my decision from the very beginning of the restructuring,” he said, adding that the state had imposed certain “public [service obligations” on the company](https://www.financedigest.com/why-financial-services-companies-should-consider-rfps-in-their-digital-transformation-strategies.html "Why financial services companies should consider RFPs in their digital transformation strategies").

Naftogaz, which accounted for almost 17% of Ukraine’s total [budget revenue last year](https://www.financedigest.com/austria-plans-to-bring-budget-deficit-within-3-of-gdp-next-year.html "Austria plans to bring budget deficit within 3% of GDP next year"), has fallen into default after failing to make a number of interest payments last month.

Vitrenko said it was “not a [smart thing](https://www.financedigest.com/it-is-time-insurers-act-smart-by-making-legacy-systems-a-thing-of-the-past.html "It is time insurers act smart, by making legacy systems a thing of the past") … to stay in default indefinitely” and the company was discussing options with the government given the crucial [role it played in the Ukrainian economy and as the key supplier of gas needed](https://www.financedigest.com/5-reasons-why-you-need-to-step-into-your-ceo-role-as-a-small-business-owner.html "5 Reasons why you need to step into your CEO role as a small business owner") for heating.

The [company said on Aug](https://www.financedigest.com/london-set-for-hosepipe-ban-from-aug-24-water-company.html "London set for hosepipe ban from Aug. 24 – water company"). 17 that its 2022 bondholders had rejected a sweetened proposal to suspend its debt payments for two years, a decision Vitrenko attributed to those [bonds trading for significantly more than those coming](https://www.financedigest.com/analysis-watch-out-risk-assets-the-rout-in-bonds-is-coming-your-way.html "Analysis-Watch out risk assets, the rout in bonds is coming your way") due in 2024.

Vitrenko said getting approval from 2022 bondholders for the [debt freeze would be “a hard sell” and it was necessary](https://www.financedigest.com/necessary-lessons-in-debt-six-out-of-ten-brits-wouldnt-feel-comfortable-discussing-any-money-issues-with-their-children.html "Necessary lessons in debt? Six out of ten Brits wouldn’t feel comfortable discussing any money issues with their children") to explain that the government needed the funds due to the war.

Some financial sweeteners would be needed as part of a package to convince creditors to approve the restructuring, adding that a [sovereign debt](https://www.financedigest.com/analysis-no-china-no-deal-bid-to-break-sovereign-debt-logjams-gets-weary-thumbs-up.html "Analysis-No China, no deal: Bid to break sovereign debt logjams gets weary thumbs up") guarantee alone would not suffice.

(Reporting by Andrea Shalal; Editing by David Goodman and Emelia Sithole-Matarise)


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