Ukrnafta has been informed that Naftogaz of Ukraine is in consultation with the Cabinet of Ministers with regard to the plan developed by Ukrnafta’s management for financial stabilisation of the company.

Earlier, the management of Ukrnafta had developed the key terms for the out-of-court recovery process aimed at maintaining the company’s solvency and submitted these to it’s Supervisory Board for approval.

The main elements of the plan include:

• - Cash flow projections for repayment of tax debt from future company performance

• - UAH 3.8 bln monetary settlement in respect to part of the 11 bln cu m of natural gas that Ukrnafta produced and delivered to Ukrtransgaz in the period 2006-2012
• - Equal monetary value contribution through retrieving payments from other debtors on the company’s balance sheet

It should be noted that this plan as submitted currently provides a possibility of partial compensation of the disputable gas value from Naftogaz of Ukraine.

Under the terms of the plan the tax debt is paid in full over a period of 3 years and the company returned back to financial health. At the same time the company will be able to maintain full production operations, high quality employment and normal contributions to the State budget.

Mark Rollins, Chairman of Ukrnafta’s Executive Board:

“I hope that all our suggestions on the company’s financial recovery plan will be thoroughly considered and the approval occurs as quickly as possible, so that we could finally have a clear plan of debt repayment to all our creditors and further develop the company.”

It’s worth noting that earlier, Ukrnafta had been approached by Naftogaz of Ukraine on the settlement of its debt for 11 bln сu m of natural gas to Ukrnafta. However, the parties have yet to reach an agreement on the form of settlement of the debt. Ukrnafta has stated that this settlement can be by gas delivery or monetary value, whichever delivers the most value to the company and its shareholders and this position is maintained.

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