Page 49 - UKRRptMar20

€90mn Eurobond placed nine months ago by Vodaphone. Last week’s roadshow was led by J.P. Morgan and Raiffeisen Bank International. In December, these two banks helped finance a $464mn bridge loan, allowing Azerbaijan’s Bakcell to buy the Vodaphone unit, Ukraine’s second largest mobile operator, after Kyiv Star.
JKX Oil & Gas (JKX LN) has fully repaid its $5.82mn bond together with a $0.38mn interest, ​the company reported on February 20. Following the repayment, JKX becomes debt-free, the company highlighted. It also reported that the group’s CFO Ben Fraser decided to leave the company and will be replaced by Dmitry Poddubniy, who acted as CFO in 2017. Taking into account JKX’s end-2019 cash balance of $20.5mn, the company faced no challenge with the smooth repayment of its latest debt tranche. Therefore, this news is neutral for the company, as well as news about the CFO replacement.
9.0​ Industry & Sectors 9.1 ​Sector news
9.1.1​ Oil & gas sector news
The average price of imported natural gas in Ukraine fell in January to a 10-year low: $175.26 per 1,000 cubic meters​. Energy company ETG.UA predicts: “It's already clear that the ongoing warm winter and the Chinese coronavirus will lower the price bar even lower.” With Chinese factories closing due to the coronavirus gas consumption is dropping. Volodymyr Shvedky, CEO of ETG.UA, says: “Based on this information, we can predict the price in 2020 at the level of $120-$150.”
Ukraine’s import price of gas may drop in half this summer – to $80 per 1,000 cubic meters​ – predicts Oleksiy Orzhel, Energy and Environmental Protection Minister. In January, Ukraine’s average price of imported natural gas was $175.26, already a 10-year low. With production sharing agreements coming up for auction in coming months, Orzhel warns ultra-low prices will turn off investment. He said Friday: “It will be very difficult to make decisions to invest in production...many companies have frozen their further extraction investment projects.”
Ukraine imported 11% less natural gas last year than in 2018, ​and paid 26% less money for it, reports the State Statistics Service. In 2019, Ukraine imported 11.7bn cubic meters of gas for a total of $2.3bn. Warm weather, over supply and a European gas glut pushed down prices.
Gas prices in Europe have fallen to $101.70/kcm – a 15 year low. ​Gas prices in Zeebrugge reached $95.70/kcm on February 7, which is a 15 year low last seen in 2005.
The spot gas prices in Europe have been below $100/kcm in February,
which is unusually low for the winter. The last time such price levels were observed was in September 2019. Given the spot price level in Europe, domestic deliveries are currently more valuable for Russian gas producers than exports to Europe. Gas prices have been depressed by a combination of
49​ UKRAINE Country Report​ March 2020 ​ ​www.intellinews.com