Naftogaz first to default in Ukraine amid new debt overhaul push

Ukraine's state-owned energy firm Naftogaz has become the first Ukrainian government entity to default since the start of the war.

The firm failed to make payments due on international bonds before the expiry of a grace period on Tuesday.

The company said in a statement that it had failed to get creditors' support for a proposal to freeze payments on some of its bonds for two years which it had launched last week.

"Naftogaz has not received consent from the cabinet of ministers of Ukraine to make the necessary payments," the company said in a statement.

"Certain events of default have or will occur as a result of the resolution and the resulting failure to pay."

Naftogaz also said that it was working with relevant parties to launch a fresh proposal for debt treatments that had been drafted by the Cabinet.

Naftogaz, which accounted for almost 17% of Ukraine's public revenue last year, had submitted two requests to the government to approve payments to creditors and avoid a hard default, though both were rejected.

The firm - which had been overdue to transfer $335 million in principal and interest payments, as well as a separate interest installment on another bond that runs up to 2024 by Tuesday - issues its bonds through its financing arm Kondor Finance.