15 Aug 2022

Weil, White & Case advise on Ukrainian debt restructuring deal

Plan will suspend Ukraine’s debt payments for two years as Russia’s war drags on

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Weil Gotshal & Manges and White & Case have advised on the successful restructuring of Ukraine’s sovereign debt.

Ukraine has been in talks with international creditors to agree a two year suspension of its debt repayments following Russia’s invasion of the country earlier this year, which is draining its financial resources and had raised the risk of a disorderly default. Ukraine has about $20bn of external debt outstanding, with roughly $1.4bn of redemption and interest payments originally falling due in September, according to Bloomberg.

Weil advised a large number of GDP-warrant and bond investors in relation to the delayed interest and maturity payments on Ukraine’s sovereign debt and to delay certain payments under its $3.2bn of outstanding GDP warrants. Ukraine’s restructuring plan was approved by a group of creditors that includes the UK, US, Canada, France, Germany and Japan. The solicitation needed to be waved through by at least two-thirds of creditors in total and more than half for each debt issue. 

A team from longstanding advisers White & Case advised Ukraine on the plan. It was led by capital markets partners Ian Clark and Olga Fedosova, who are based out of London and Paris respectively.

Andrew Wilkinson, co-head of Weil’s London restructuring practice, said the consent solicitation will allow the Ukrainian government to address liquidity and financial pressures, praising Ukraine’s efforts to constructively engage with the capital markets.

Wilkinson led Weil’s team, assisted by counsel Kirsten Erichsen and capital markets partner Alexander Horstmann-Caines.

Ukraine’s Prime Minister Denys Shmyhal said the plan will save the country almost $6bn in payments, which will help strengthen Ukraine’s economy and increase defence spending. The country is also seeking as much as $20bn from the International Monetary Fund to help support its war torn economy. The US also said it would send an additional $4.5bn of aid payments to Ukraine.

Ukraine’s central bank said it expects the country’s economy to contract by 30% this year.

Ukraine last restructured its debt in 2015 in the wake of Russia’s annexation of Crimea and a Russian-backed separatist movement in the east of the country. Clark also led for White & Case on that deal, with Wilkinson leading the Weil team advising the ad hoc creditors’ committee on the $18bn restructure.

 

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