PWC to Accelerate Ukraine Unbundling

Ukrainian state-owned Naftogaz's supervisory board has advised the management to engage consultancy PricewaterhouseCoopers (PWC) to support accelerating the unbundling of the transmission system operator (TSO), the company said July 16.

"PWC will begin its work immediately. The supervisory board and management of Naftogaz of Ukraine are committed to implementing a swift unbundling in accordance with the government’s directive in a transparent, effective and efficient manner," the company said.

Unbundling has long been on the wholly state-owned company's agenda, but it was decided not to proceed until the arbitration case with Gazprom had ended, which formally occurred late February with the Stockholm ruling. Russian gas giant Gazprom however has refused to accept the judgment. The transit contract is signed by Naftogaz Ukrainy, the parent of UkrTransGaz, whose pipeline and storage assets are to be spun off. 

Naftogaz has also announced an open bidding to assign a credit rating which will facilitate a eurobond issue by the company. The scope of work includes preparation of an analytical report of the company’s activities, assigning and publication of a credit rating in English on the winner’s official website. The expected price shall not exceed UAH 3.99mn (around $150,800).  It added that bidding credit rating agencies must comply with the highest international professional standards applied to similar services, and work in accordance with the EU regulation 1060/2009 on credit rating agencies.   The submission deadline for bidding proposals is 10 am 30 July 2018.  Bid participants must comply with qualification criteria and requirements as set out in the Bidding Documents.

As it is expected that the company’s planned Eurobonds will be offered to both European and US investors, bidding participants must be nationally recognised statistical rating organisations (NRSROs),  according to Section 15E of the US Securities Exchange Act of 1934.