Naftogaz CEO Kobolyev / Photo from UNIAN
The government first needs to green-light the LPN issue.
NJSC Naftogaz of Ukraine is ready to issue loan participation notes (LPN) next week to raise funds to pump gas into storage facilities and pay dividends to the budget.
"We have everything ready to tap the market next week. We have large international banks that are ready to invest substantial funds in this issue. The sums are estimated at over US$100 million," Naftogaz CEO Andriy Kobolyev told reporters on Friday, July 5.
Read alsoPM Groysman says he may sack state companies' CEOs over reluctance to pay dividends to budget
According to him, to enter the foreign capital market, the company needs the government's permission.
Raising funds will allow the company to pump a sufficient amount of gas into the storage facilities and pay dividends to the government.
"Accordingly, we have a high probability that we will do this, but we need permission for this, then we raise money and then we carry out all the tasks that the shareholder [the state] sets before us: we pump gas and smoothly pass the winter, and pay dividends," he said.
As UNIAN reported earlier, Kobolyev said early this March that the company plans to return to the issue of placing notes after the parliamentary elections. Funds to be received from the placement of the securities could be spent on the purchase of gas to prepare the country for a possible scenario when Russia may stop gas transit shipments through Ukraine from 2020 after the current transit agreement expires. In November 2018, Naftogaz postponed the issue of bonds as the market was instable and potential costs of borrowings were high.
On October 22, 2018, Kobolyev said the company planned to issue notes worth between US$ 500 million and US$1 billion. According to him, the goal of placing securities is to ensure the company's financial balance, including through the repayment of loans.