Naftogaz bondholder group says firm's debt plan fails to tackle concerns

LONDON, Aug 4 (Reuters) - A reworked proposal by Ukraine’s state-owned gas company Naftogaz on its international bonds has failed to address creditors’ concerns, law firm Dechert which is representing a group of holders said on Thursday.

Naftogaz had laid out a new debt payment freeze plan on Tuesday, a week after becoming the first government entity to default since the start of the Russian invasion of Ukraine on Feb. 24.

The amended offer contained additional incentives, including added interest payments, in a bid to secure the backing for a two-year moratorium on debt payments after an original proposal launched on July 11 had been rejected.

Bondholders represented by Dechert “understand and are sympathetic to the difficulties that Ukraine currently faces as a result of the ongoing military conflict with Russia,” the law firm said in a statement.

“Nevertheless, the company remains a sustainable business operating on a sound financial footing and does not face the same types of challenges confronting Ukraine at the sovereign level,” it added.

Dechert has not disclosed the share of bondholders it represents. Holders have until Aug. 12 to cast their vote on the proposal.

Reporting by Karin Strohecker; Editing by Susan Fenton