Page 18 - FSUOGM Week 39 2021

FSUOGM POLICY FSUOGM

Cabinet dismisses Naftogaz supervisory

board, reshuffles executive board

UKRAINE THE Cabinet of Ministers has dismissed two distribution companies, UAH10bn ($376mn)
executive board members of Naftogaz (NAFTO) extra tax expenditures related to the division
Three independent and appointed four members to vacant positions of Ukrnafta assets and other extra costs of
members of Naftogaz's on September 27, rbc.ua news site reported. This UAH8.9bn ($334mn). The company is offering
supervisory board became possible after the Cabinet dismissed to cover the deficit with a UAH51.2bn ($1.9bn)
announced their all the members of the company’s supervisory payment from the operators of the gas transit
resignation on board and, as the sole shareholder, assumed the system and the rest, with money to be received
September 7. authority of the board. Last week, the supervi- from the implementation of a special law on debt
sory board dismissed two executive board mem- settlement on the gas market, including budget
bers, COO Otto Waterlander and CFO Petrus outlays of UAH33.7bn ($1.3bn) and UAH10bn
van Driel, according to Interfax-Ukraine. In this ($375mn), which are the expected collections
way, the Naftogaz executive board has been fully by the government of extra taxes/royalties from
reshuffled and only CEO Yuriy Vitrenko has Naftogaz. According to Vitrenko’s letter, Nafto-
retained his position. gaz had UAH57.7bn ($2.2bn) cash as of May 1,
Recall, three independent members of Naf- which has been fully spent for stockpiling nat-
togaz supervisory board announced their resig- ural gas (including 2.1 bcm of imported gas for
nation on September 7, so they had two weeks to UAH27bn ($1bn)).
conclude their responsibilities in the board. With Now that the insurgent supervisory and exec-
their exit, the board lost its quorum and became utive board members have left the company, Vit-
dysfunctional. renko and Shmyhal are taking full responsibility
In other news, CEO Vitrenko has sent a let- for Naftogaz's operations, for good or bad. At
ter to PM Denys Shmyhal estimating Naftogaz’ least, for the company and its shareholder, it will
extraordinary expenditures and working cap- be much easier to adopt any decisions necessary
ital needs at UAH123bn ($4.6bn) in the short to resolve any liquidity issues. In any case, it is
term, rbc.ua news site reported on September likely that Naftogaz will try to place a Eurobond
24. They include UAH17.5bn ($657mn) for this autumn to partially cover its working capital
the import of 0.9bn cubic metres of natural gas, needs for the upcoming season and secure the
UAH33.7bn ($1.3bn) extra gas production roy- repayment of the nearest Eurobond in July, after
alty (the royalty is tied to the price of imported the season is finished. Taking into account all the
gas), UAH53.2bn ($2bn) in extra working capi- challenges that Naftogaz meets now, its bonds
tal needs related to gas supply to heating and gas might become more volatile in the short term. ™

P18 www. NEWSBASE .com Week 39 29•September•2021