No compromise: creditors have rejected Ukrzaliznytsia’s restructuring plan
12 April 14:03
JSC “Ukrzaliznytsia” held limited negotiations from April 1 to 8 with members of the ad hoc group (AHG) of its Eurobond holders, during which it presented its proposal for restructuring the bonds, but so far without success.
This was reported by "Komersant Ukrainian" citing Interfax-Ukraine.
“…the bondholders noted that, although they support a consensual restructuring of the bonds, they do not wish to participate in Ukrzaliznytsia’s proposal and have not submitted a counterproposal at this stage,” the company’s statement reads.
It is noted that the group of bondholders decided not to seek an extension of the limited negotiations after the specified period ends.
“Although Ukrzaliznytsia and the holders of restricted bonds did not reach an agreement on the terms of the bond restructuring during the limited period, “Ukrzaliznytsia intends to continue good-faith cooperation with AHG, including through the parties’ respective advisors, with the aim of reaching an agreement,” the statement emphasizes.
According to the statement, Ukrzaliznytsia has been joined by its legal advisors Clifford Chance LLP and Sayenko Kharenko, as well as its financial advisors Rothschild & Cie and FinPoint LLC, while the limited bondholders have been joined by AHG’s legal advisors Hogan Lovells International LLP.
As reported, in January of this year, Ukrzaliznytsia refused to make $45 million in coupon payments on its 2026 and 2028 Eurobonds, due on January 9 and 15, respectively, and announced its intention to initiate a comprehensive restructuring of its financial obligations under the loan agreements related to the bonds, with the assistance of qualified financial and legal advisors.
The company cited the ongoing decline in freight revenue and the resulting reduction in freight volumes—which is expected to reach approximately 17% in 2025— as well as an increase in attacks on the railway, the total number of which in 2025 (1,195) exceeded the combined figure for 2023–2024.
In February, the international rating agency Fitch Ratings downgraded the long-term issuer default rating (IDR) of JSC “Ukrzaliznytsia” to “RD” (Restricted Default) from “C,” and the long-term ratings of its Eurobonds maturing in 2026 and 2028 to “D” from “C.”
In January–September 2025, Ukrzaliznytsia reduced its revenue from ordinary activities by 15.4% compared to the same period in 2024 — to 66.03 billion and reported a net loss of 7.32 billion UAH, compared to a net profit of 1.66 billion UAH for January–September 2024.
Revenue from freight and mail transportation for the first nine months of 2025 decreased by 19%—to 50.1 billion UAH, while revenue from other services fell by 14.7%, to 6.36 billion UAH.
