Ukraine to inject $501 million more in Naftogaz’s charter capital
Ukrainian state oil and gas company Naftogaz Ukrainy will increase its charter capital by Hr 4 billion to Hr 49.841 billion from Hr 45.841 billion.
Ukrainian state oil and gas company Naftogaz Ukrainy will increase its charter capital by Hr 4 billion (around $501.44 million at the current exchange rate of Hr 7.977/$1) to Hr 49.841 billion from Hr 45.841 billion.
“Naftogaz Ukrainy charter capital will be raised by Hr 4 billion through an additional share issue at current par value with the government maintaining their 100% stake,” reads a Cabinet of Ministers resolution (No. 1088) dated Oct. 24, 2011, published on the government’s Web site Monday.
The company’s charter capital will thus be raised by 8.7%.
Shares will be paid for with government domestic loan bonds with 6-7 year terms. Interest should not exceed 9.5% per annum.
Naftogaz’s capitalization through government domestic loan bonds began in the summer of 2009 with Yulia Timoshenko’s government. Initially, the company’s charter capital was increased by Hr 18.6 billion to Hr 24.165 billion.
Naftogaz began to sell bonds or conclude repo deals with banks, enabling the company to pay for Russian gas purchases.
The government issued another resolution on Naftogaz capitalization with Hr 12 billion worth of the bonds in December 2009. However, only partial capitalization was carried out and Naftogaz received Hr 5.776 billion in the bonds.
Then the new government of Mykola Azarov decided to add another Hr 7.4 billion to Naftogaz’s charter capital, increasing it to Hr 37.341 billion in October 2010.
The charter capital was given another Hr 5 billion boost in late December 2010, bringing it to Hr 42.341 billion.
The Cabinet resolved to add Hr 3.5 billion, or 8.3%, in May 2011, to Hr 45.84 billion. The shares were paid for by bonds with 5-6 year terms and a yield of 9.5% per annum.
Finance Minister Fedir Yaroshenko told the press in September that the Ukrainian government planned to spend Hr 12 billion on Naftogaz capitalization in 2012 through government domestic loan bonds.
The money will be used to finance the difference in the price between the natural gas imported by Naftogaz and its sales to energy companies.
NJSC Naftogaz Ukrainy includes the country’s largest oil and gas production companies. It holds the monopoly on natural gas transit and storage as well as for oil transportation by pipelines within Ukraine.