Page 51 - UKRRptMay20

comparison, around the bottom of the previous cycle, at the end of 2015, Metinvest had $353mn in trade-related NWC, which amounted to only $0.35bn, or 5% of L12M revenue. If Metinvest goes through April-May without defaulting on any of its debt service payments (PXF principal repayments, coupons on its notes), as we assume it is fully able to, this will signify the holding’s desire to maintain good standing with its creditors. Conversely, Metinvest might in theory be considering putting its debt service payments on hold, possibly due to the price depression on the steel markets in March-April, and in analogy to what another SCM-controlled company, DTEK Energy, did in late March. In such a case, a convenient time point to pull the trigger will be right before the April-May increase in debt service payments. We maintain our negative view on METINV bonds.
Ukrainian state-owned lender ​Ukreximbank​ is considering a scenario to repurchase its eurobonds ​from the market and replace them with cheaper and longer-term resources, chairman of the financial institution Yevhen Metsger was quoted as saying by Interfax Ukraine. "As one of the working scenarios, the repurchase of our eurobonds from the market is considered, the rate at which is about 10% in dollars, and replacing them with cheaper and longer-term resources from the International Monetary Fund [IMF]," he said. According to Metsger, the bank is holding a dialogue on additional capitalisation with the Finance Ministry as a representative of the owner and with the National Bank of Ukraine (NBU). "Formally, the management will first discuss the situation and forecast of activities with the supervisory board, then ask it to apply for additional capitalisation to the government. For the entire cycle, we assume that it will take us time until the end of the second quarter," Metsger explained, adding that the bank needs additional capital to enable it to develop. Without additional capital, the bank will also not be able to provide the necessary support during a pandemic to a number of clients and key sectors of the economy, Metsger noted.
51​ UKRAINE Country Report​ May 2020 ​ ​www.intellinews.com