The Cabinet of Ministers of Ukraine has approved the financial plan prepared by PAO Ukrzaliznytsya, which includes the planned issue of bonds worth $73.53 million by the corporation, the acting Board Chairman Yevhen Kravtsov has told journalists, Interfax-Ukraine reports.
“We kept the $73.5 million bond issue in the financial plan, as we consider it appropriate. Last autumn, we wanted to issue the bonds, but we had sufficient funds at the time and the conditions of the domestic market were not so favorable. This is why then we decided to postpone the issue until 2018. We estimate that the placement of the bonds will occur at the end of the second or third quarter of 2018,” he said during an inspection visit to the construction site of the Beskydsky tunnel on Thursday, 15 February 2018.
At the same time, Yevhen Kravtsov said that in order to issue the bonds there must be a shortage of funds.
“We do not intend to place the bonds simply for the sake of it. We will hope for the good development of capex. Also, the National Bank of Ukraine has raised the interest rate, which significantly increased the cost of financing,” the acting head of Ukrzaliznytsya said.
According to Yevhen Kravtsov, the corporation seeks to issue bonds in order to attract a greater variety of investors and foreign banks in order to reduce the cost of financing.
In 2018 Ukrzaliznytsya expects to borrow to the tune of $687 million, including the issue of domestic bonds worth $73.5 million and loan payback in the amount of $530 million, based on the exchange rate of UAH 29.2/ $1.