Sayenko Kharenko has acted as Ukrainian legal counsel to Citibank, N.A., London Branch and Deutsche Bank AG, London Branch as mandated lead arrangers and original lenders on a EUR 478,285,000 facility to PJSC “National Joint-Stock Company Naftogaz of Ukraine” (Naftogaz). The financing is guaranteed by the International Bank for Reconstruction and Development (IBRD) and has the benefit of a sovereign guarantee in the form of indemnity provided by Ukraine to the IBRD.
The facility was made in the form of a letter-of-credit and direct-disbursement financing and is available for utilization by Naftogaz for two years. The deal structure is aimed at improving the commercial terms of Naftogaz’s gas-purchase contracts through offering the suppliers letters of credit issued by major international banks. The IBRD’s guarantee — backed by an indemnity from Ukraine — helped Naftogaz secure cost-effective financing for this purpose.
The deal was made within the framework of the World Bank’s Gas Supply Security Facility Project for Ukraine and, according to the World Bank, is “part of the World Bank Group’s support to wider reforms in the energy and gas sector to help Ukraine create an energy system that can deliver reliable and affordable energy services to families and industries."
Sayenko Kharenko Partner Nazar Chernyavsky, who led the firm's team, commented: “For us, it is a great privilege to be a part of the team assisting Citibank and Deutsche Bank, who, together with the World Bank, Ministry of Finance and Naftogaz itself, successfully implemented this innovative financing. The deal became unique for the Ukrainian market, both in terms of its strategic importance for the country and commercial and legal complexity. Successful launch of the project required a lot of focus and cooperation among the wide circle of the parties involved, as well as much effort on the part of their legal advisors.”
Chernyavsky was supported by Sayenko Kharenko Counsel Anton Korobeynikov, Senior Associate Maria Tsabal, and Associates Marta Lozenko, Taras Shyb, Dmytro Vasylyna and Mykhailo Grynyshyn.
Negotiations for the lenders and documentation were led by Allen & Overy Senior Associate Tom Longmuir out of Paris, working with Partner Tim Scales in London. A&O Senior Associate Lulama Selele, Associate Alicia Ayton, and Trainee Solicitor Hannah Savill assisted as part of the lender team. A separate London-based team comprised of Partner Luke Lewis and Senior Associate Louise Hennessey acted for Citibank Europe plc, UK Branch as facility agent, and a team led by Partner Morgan Krone and assisted by Associates Louisa Ingham and Alex Cook acted for Citibank, N.A., London Branch as offshore accounts bank.
Image Source: naftogaz.com