World Bank's $ 500m loan to Naftogaz's under threat due to new regulations amendment
Ukraine's Economic Development and Trade Ministry with amending the regulations of national joint-stock company Naftogaz Ukrainy under order dated September 7, 2016, has put under a threat the signing of a $500 million loan agreement between the holding and the World Bank.
"Changing the Naftogaz's regulations in the way as it happened last week is a violation of OECD corporate management principles and liabilities taken by Ukraine. These events put under a threat the signing of the $500 million loan agreement between Naftogaz and the World Bank," the press service of the holding told Interfax-Ukraine.
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Naftogaz recalled that the funds are required to buy gas for passing the 2016/17 heating season by Ukraine stably.
"This is also a violation of the conditions of the EBRD loan agreement and a potential default on the government-secured debt. This could affect other issues with the involvement of Naftogaz," the press service said.
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According to Interfax-Ukraine, the Economic Development and Trade Ministry has not notified top managers of Naftogaz and renewed the holding's regulations, transferring the functions to manage Ukrtransgaz to the ministry, while earlier it was managed by Naftogaz Board. In particular, paragraph 48 of the regulations was expanded. The general meeting of shareholders now has the right to reshuffle the board of directors and the supervisory board of Ukrtransgaz, amend the company’s regulations and approve its financial plan and investment program.