The head of the board of “Ukrzaliznytsia”, Oleksandr Pertzovsky, believes that the successful restructuring of the company’s eurobonds will only be possible with state funding for passenger transportation and the indexation of freight tariffs.
This is reported by Finway
Debt Situation and Strategic Projects
According to Pertzovsky, the current debt burden of “Ukrzaliznytsia” is about 15% of the total value of its assets, which amounts to approximately ₴60.6 billion ($1.464 billion). A significant portion of this debt was formed due to the implementation of large-scale infrastructure projects, including the construction of the Beskyd Tunnel in the Carpathians and the Darnytsia Bridge in Kyiv. Initial bank loans have been refinanced multiple times and were later converted into eurobonds maturing in 2026.
“Right now, we essentially have debt that was taken to finance projects that existed before 2012 and, unfortunately, had no economic viability. Now we are attracting capital for clear projects with a defined payback period. For example, we are investing in generation to reduce our electricity costs or in new locomotives; otherwise, freight transportation will come to a halt,” said Pertzovsky.
Plans for Restructuring and Prospects
“Ukrzaliznytsia” plans to restructure its eurobonds to spread payments over time and avoid a significant financial burden next year. The company’s management is convinced that the key to successful restructuring will be the long-term stability of the company, which will be ensured by dialogue with creditors, state support for passenger transportation, and a review of the tariff policy for freight transportation. These factors, in the opinion of the management, will be able to convince bondholders of the potential and reliability of “Ukrzaliznytsia” for the next five to ten years.