Group of Ukrainian Railways Eurobond holders rejects restructuring proposal
MOSCOW. April 13 (Interfax) - Ukrainian Railways, Ukrzaliznytsia, held limited negotiations from April 1 on 8 with the ad hoc group (AHG) of holders of the company's Eurobonds, during which it presented proposals for the bonds' restructuring, but so far without results.
"[...] the bondholders noted that although they support a consensus restructuring of the bonds, they do not wish to participate in Ukrzaliznytsia's proposal and have not submitted a counterproposal at this point," Ukrainian media quoted the company as saying in a statement.
The group of bondholders decided not to seek an extension of the limited negotiations after the specified period expires, it said.
"Although Ukrzaliznytsia and the bondholders with limited rights did not reach an agreement on the terms for the bond restructuring during the limited period, Ukrzaliznytsia intends to continue its good-faith cooperation with the AHG with the aim of reaching an agreement, including through the parties' respective advisors," the statement said.
Ukrainian Railways was joined by its legal advisors, Clifford Chance LLP and Sayenko Kharenko, as well as by its financial advisors, Rothschild & Cie and FinPoint LLC. The bondholders with limited rights were joined by the AHG's legal advisors Hogan Lovells International LLP, it said.
As reported, Ukrainian Railways said in January 2026 that it would not make $45-million coupon payments on the 2026 and 2028 Eurobonds due on January 9 and January 15, respectively, announcing plans to launch a comprehensive restructuring of its financial obligations under the loan agreements related to the bonds, also hiring qualified financial and legal advisors for this purpose.
The company cited the prolonged decline in freight shipping revenue amid a decrease in freight traffic, which is expected to reach around 17% in 2025.
Fitch Ratings in February downgraded Ukrainian Railways' Long-Term Issuer Default Rating (IDR) to 'RD' from 'C' and the long-term rating of its Loan-Participation Notes (LPNs) due in 2026 and 2028 to 'D' from 'C'.
In January-September 2025, Ukrainian Railway's income from core operations was down 15.4% to UAH 66.03 billion compared to the same period in 2024, and it posted a net loss of UAH 7.32 billion against a net profit of UAH 1.66 billion in January-September 2024. Its income from freight and mail transportation in the reporting period of 2025 decreased by 19% to UAH 50.1 billion, and income from other services decreased by 14.7% to UAH 6.36 billion.
